Emergencies happen. Date nights happen. Cute shoes happen.
And they should....well, not emergencies...
Despite the occasional need for spending, there are ways to save for big ticket items and experiences without compromising the things you love.
But you have to change things up a bit.
Define what it is that you want. It's easy to say that you want more money. Why are you saving? How much do you need?
For example, are you saving to travel? How long will you be on the road? What is your cost per day?
On the other hand, if you want an income property that costs $150,000, you probably will need $30K for a down payment. How will you save that?
Are you saving for an emergency fund? Figure out your three-six month expenses and start saving.
Define you goal. From there, you can figure out your saving plan and your monthly or weekly steps to achieving that goal.
Here are some ideas.
- Track your spending for a week or a month and then analyze it with a critical eye. Look at it as it were a work project. Where can you save? Where is there evidence of wasteful or unnecessary spending? Are you paying interest on your credit card?
- If you haven't already, set up an automatic savings plan with your bank. You can have a set amount withdrawn every week or every month or twice a month...whatever works for you. Saving $25 a week will give you $1300 in a year. It's a start.
- Speaking of banks, Bank of America offers a "Keep the Change" option for debit card users. They will round up your purchase and put the difference into your savings. Everything counts.
- If you pay off your credit card every month, consider a card that gives you points or cash back. This is only worth it for people who carry a zero balance.
- Do you need cable? For about $100 a year, the benefits of Netflix streaming is better than the fees charged by cable and satellite providers. We have a Roku device, and with Netflix and the content provided through my Amazon Prime membership, we're all set. Our tv gets local channels without cable. It depends on your needs. How much are you spending now?
- Avoid the 300% markup on booze and entertain at home.
- Clean out your closet and sell your stuff on Instagram. Take clear, unfiltered photos, use concise hashtags to market your things, and link to a PayPal account for easy transactions.
- I love Starbucks as much as anyone. But I refuse to pay $4 or more for a latte. Consider drip coffee and add your own milk. Or make it a once a month treat if it's worth the nearly $50 cost. Everyone has their non-negotiables..define yours.
- Cook at home. And cook with what's fresh, in season, and on sale.
- Pay your debts. Pay off the smallest one first and then continue to "pay," applying that payment and another to the next smallest debt. Work your way up.
- Paying a mortgage? Doubling up on a payment, even once a year, may save you in interest over time. Use a windfall, like a tax refund, to make it happen.
- Pay off your car early, if you can. Keep it in good condition and hang on to it. When it needs repairs, consider the local voc-tech school. You will pay for parts only (not labor) and you will help out the kids being hired in the local garages when they graduate. Most voc-tech schools are ASE-certified. This is a win-win. Take the money you saved and add it to your savings.
- When you want to go out, look at what free events your city is offering. Many libraries offer free museum passes and Bank of America card holders can get into many museums for free on the first weekend of ever month. Take the money you would have spent and add it to your savings.
- Go back to your tracking...transfer money saved to your savings.
The law of checks and balances dictate that what we spend is always in exchange for something else.
Nomadic Matt claims that you can travel the world for $50 a day. Is that dinner out worth a day on the road?
Sometimes yes. But if your goal is bigger than that dinner out, it might be worth a dinner in.
What was the most valuable tip you read here? How do you save for big ticket items or experiences?