We’ve heard it since we were young: save money, save money, save money. But when it really comes down to it, how do you save money when you don’t make a whole lot to begin with? We’d all love to have a big savings account, to be sure, but how to actually get there is the big question. Unless you’ve just won a lottery lump sum payout, it’s probably hard to consider what a savings account could really look like. On top of minimal income, there’s debt. The average American has almost four credit cards and numerous loans from personal to housing to school. With 20% of young Americans admitting to be in debt hardship, it can be hard to even picture a savings account. But with these few tips, you should be able to start on the right path.
Shop Around Never buy something that without checking out other places first. As I mentioned, short of a lottery lump sum payout, we could all use a minute to think about our purchases. Price comparing at other stores will help you to find the lowest possible price for the highest amount of savings. Some grocery stores will price match and if it’s an item you don’t really need, taking a few days to look for a cheaper price will also give you some time to really think about how much you need the item at all, eliminating impulse buys.
Save the Change Loose change adds up. Sure, it’s no annuity settlement, but every little bit counts. If you put your loose change in a jar every night and keep an eye out for ways you can continue adding to it, you’ll soon begin to be able to add to your savings account without even noticing the money that you’ve been putting in the jar is gone.
You could add to your jar by putting 5% in every time you get cash out or putting in all the $1 bills you get as well. If you’re feeling adventurous, put in all the $5. Be honest — that $5 bill was probably just going to go to chocolate bars or energy drinks anyway!
Have a Reason If you are just setting aside money for general savings, it can be hard to keep it. Have a reason in mind or a goal, something you are saving for. It could to pay for car emergencies, late bills, or even vacations. It does not really matter what the reason is, just have a purpose for your savings account. Even if you decide to change the purpose further on down the line, that is fine. This way, you can avoid emptying the savings unnecessarily.
Automatic Savings You can set up your paycheck so that a certain percentage goes into one account and the rest into another. If you set up your savings and checking this way and split your paycheck, you can look at your checking without even seeing the savings amount. This will help to ensure that you save something out of each check. All you have to do is decide the amount that you would like to save every pay check. If you work for yourself, then you could set up an automatic transfer every month into your savings.
Sell Your Structured Settlements This one is for a very select few people only. If you do come into a lot of money, like a lottery lump sum payout or an inheritance, then chances are you have to receive it in small payments over a long period of time. However, you do have the option to sell your annuity and get the cash right away. This can pay off debt and then the monthly payments that were going towards loans and credit cards can be put into savings instead. It will also give your savings a very nice boost, depending on how much you are getting. Whether it is a lucky lottery lump sum payout or an expected insurance settlement, look into selling and see if that is a better option for your savings account.
If you have any questions, feel free to share in the comments.