Are you sinking in debt? Or living from one paycheck to the next? Many studies indicate that the average American is spending less than $1000 annually.
Money Saving Tips from The Experts
Whatever your situations, these money saving tips from financial experts will help you improve your financial position:
Make A Budget
The first rule of saving is to get a budget in place. Make a list of all your expenditure. Start with the big ones and move downwards: your rent, mortgage payments, loan payments, utility bills, grocery bills, transport, gym membership, and daily expenditure. Everything goes in your budget.
When you list down your expenses, you will likely find that a good amount of your income is going into unnecessary expenses. I call these them ‘the ripped pocket expenses’. It’s like you are putting your money into a pocket that’s ripped. Sew these pockets shut. Cut down on these hidden expenses first.
Save First, Spend Second
Once you have created your monthly budget, compare it with your current income. Your expenses should always be lower than your budget to save money for emergencies and to retire with style.
You should always have money left for savings. If your expenses are higher than or equal to your income, then you should either consider cutting down your expenses or getting a new income source. Set a fixed amount for your savings after you have created your budget.
When you receive your income, transfer that amount to your savings account first. You can automate this process. Now you can spend all your income without a worry!

Save 25% of your earnings
One question most people ask is how much should they be saving? Experts suggest saving around 25% of your income for a stress-life financial future. Saving more than this could make you unhappy, and saving less could make your bank account unhappy.
Open a saving account. You can easily create one with your current bank by filling out an application. If you are in the chexsystems, your bank might reject your application. If that’s so, you should first wait to get out of the chexsystems, before applying for saving. Read this to find out how long does it take to get out of chexsystems?
Invest in a High Yield Saving Account
A high yield savings account will give you a higher interest when compared to a normal saving account. You will simply save more with a high yield saving account. You will likely have to pay a maintenance fee for your account.
Some high yield saving accounts will require you to maintain a monthly balance. Find out the bank’s requirements before opening your account. Read the fine print.
One thing to look for is that your bank is insured by the FIDC. With an insured bank, your money up to $250,000 will be protected from bankruptcy or other disasters.
Invest 15% of your savings in a simple portfolio
You won’t be working your entire life. If you want to save money for your retirement, consider investing your savings. Retire early and in style. According to William J Bernstein, choose a simple portfolio. Put your savings equally in between the IRA, a taxable account and your retirement plan 401(k). Invest them in US stock fund, an international stock fund, and a US bond market fund.
Use Your Credit Card Wisely
The misuse of credit card is among the top reasons most Americans end up in a debt mess. When you aim to save money, you should be extra cautious of your credit card usage. Find out your credit card limit. Never exceed more than 30% of that limit.
Make use of the benefits offered by your credit card. Most credit card companies collaborate with business to offer discounts or other perks with the use of their credit cards. Find out what your credit card is offering. Make use of those offerings.
Another important thing you should be keeping in mind when using credit cards is to read your credit card report carefully at the end of each month. Look for mistakes. Maybe the store you bought from charged you twice. Or a payment was wrongly added to your card. You will be surprised to find out how often that happens.
Save Your Change
Here’s a neat little trick. Make a special corner or a pocket in your purse or wallet for the change. Whenever you get any change, save it in that pocket. Transfer it into a piggy bank when you get home. Add in $5 bills from time to time. Don’t touch it for a year. You’d be surprised at how much you can save from just saving on your change. I once saved $1,246 from just loose change in a year.
Saving money requires dedication and willpower. There might be months when you get off the track. Don’t let that scare you. Get back on track as soon as you can.
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