Saving money isn't always fun or easy -- but it's a necessary thing to do if you want to get your financial house in order. We all need near-term savings for emergency expenses, and we all need a solid amount of retirement savings to pay our bills in the future. If you've been known to neglect your savings, then it's time to ramp up -- and these easy tricks will help you do just that.
1. Follow a budget
Saving money becomes much easier once you get a sense of what your expenses look like. And that's why you need a budget. Once you set one up, you'll see exactly what your various bills cost you, and you'll also be clued in as to what things you're overspending on. For example, upon setting up a budget, you might see that you drop around $200 a month on takeout and restaurant food, all the while neglecting your savings. If you pledge to cut that figure in half, you'll bank a cool $1,200 in the course of a year.
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2. Automate the process
Automating your savings takes the temptation to spend out of the equation -- and that's why it's worth doing. If you don't have a fully loaded emergency fund -- one with enough money to cover three to six months of essential living expenses -- then your first priority should be to boost your near-term savings. To that end, you can arrange for a portion of each paycheck you receive to filter directly from your checking to savings account. Once your emergency fund is complete, you can do the same for your retirement savings, either by having your employer deduct funds from your paycheck to land in your 401(k), or by finding an IRA with an automatic transfer feature and arranging for part of each paycheck to wind up there every month.
3. Shop only with cash
Credit cards might make shopping more convenient, but they can easily lead to overspending. And the more money you waste when you hit the stores, the less you stand to save. A better bet? Get into the habit of shopping only with cash. If you make shopping lists ahead of time, estimate your costs, and bring only enough cash to buy the things you're planning to get, you'll eliminate the option to give into impulse purchases. Of course, this trick only works when you're shopping in actual stores; it won't work online. But every little bit helps.
4. Bank your bonus money
Chances are, you'll come into money during the year outside of your regular paycheck. You might get a tax refund, a generous cash gift from a relative for your birthday, or a dividend payment from an investment you hold. Putting that extra money into savings is a great way to stay on track and meet your goals -- all without having to worry about finding the funds.
The more savings you have, the more peace of mind you'll buy yourself. Use these tricks to boost your savings in the coming year -- you'll be thankful you did.
