10 Budget Tricks to Boost Your Monthly Savings
- August 21, 2020
- by Ashley Chorpenning
If you struggle to save each month, there is no need to stress any longer. Here are a few budgeting tricks you can use to boost your emergency savings in no time.
Why worry about saving money? Well, it’s recommended that you set aside a cash supply of at least three to six months of your expenses in order to prepare for any emergencies that arise. Your emergency fund is there to cover the loss of a job, an urgent medical issue, broken pipes, a car wreck, a natural disaster, etc
Unfortunately, too many Americans fall short and put themselves at risk. According to Bankrate, 34% of Americans experienced a $1,000 unexpected expense last year. Yet, only 39% of Americans could cover this expense with their savings.
Track your expenses
The first step to boosting your emergency savings is evaluating all of your current expenses. You want to determine which expenses are absolute necessities and which are luxuries. Using your funds to pay for needless expenses can result in a miscalculation of your emergency fund needs.
Review your credit card and bank statements to determine where your money goes every month. Reviewing your statements will help you highlight areas of spending you may be able to cut from your monthly budget. Creating a list of your expenses will help you boost your emergency savings while minimizing your expenses. For couples, see our post on working with your significant other to develop a budget.
Eliminate subscriptions you rarely use
Now that you know what expenses need to stay, you can get rid of the ones that should go. If you rarely use your gym membership or completely forgot about your Audible subscription, this is a good time to cancel the services that go unused.
Once you have canceled these expenses, use the extra cash toward your emergency savings.
Automatically save your change
Every purchase we make generates change. But did you know there are savings apps that can help you save your change? Apps like Acorns and Chime round up your purchases and deposit the difference into a savings account.
Using similar apps will help you boost your emergency savings without even thinking about it.
If you were to eat out during lunch every weekday and spent about $10 per meal, you would end up spending about $2,600 annually. If you packed your lunch at least 3 days a week you could save $1,560.
Meal prepping allows you to save on your dining out expenditures while maintaining a healthy lifestyle. It may take a little more thought and preparation but you could end up saving a significant amount of money by spending a few hours packing your meals.
Ask for discounts
Have you ever heard the saying, “it never hurts to ask”? Well, it couldn’t be more true when discovering deals and discounts. Many consumers go through their day assuming that if there is no deal listed, then a discount is not available. However, this is far from the truth.
By asking a retailer or service provider, they may be willing to share some secret saver information. So, next time you go to make a purchase, ask if there are any deals or discounts available. You never know what you will be able to find.
Purchase generic items
It’s easy to adopt brand loyalty when you become comfortable using a specific item. However, using generic brands may help you save money. You may learn you can’t even tell the difference between the generic brand and the high-end brands.
Next time you are grocery shopping, grab the generic items and see if you can tell the difference.
Apply the 24-hour rule
With many consumers turning to the internet for their shopping needs, it’s easy to purchase anything in a matter of seconds. The ease of online shopping is a blessing and a curse. If you’re not careful, it can end up breaking your entire savings budget in one swoop.
If you are the type of person who is passionate about shopping, try applying the 24-hour rule. This rule states that you will wait at least 24-hours before making any purchases. This gives you time to contemplate your purchase and decide if it’s an item you need. Most of the time you will find you won’t go through with the purchase after giving it some thought.
Find a savings buddy
Boosting your emergency savings alone can be a challenge when all of your friends would rather spend than save. Try enlisting a friend that’s like-minded when it comes to saving. This will not only keep you motivated toward your savings goal, but it will also help you stay accountable.
You could even make it a competition to see who can reach their savings goal first. Whoever loses must treat the other one to ice cream or another inexpensive treat.
Use other forms of transportation
Using your car all the time can put wear and tear on your vehicle which leads to maintenance and any empty gas tank. Riding your bike or taking a walk can help you save on your transportation costs. If you live in close proximity to work or social events, other forms of transportation may be a good solution for boosting your savings account.
Get serious about eliminating high-interest debt
Do you have an astronomical amount of high-interest debt? Do you realize it’s costing you more than you think? High-interest debt can chip away at your budget leaving you with little to no extra cash to put toward your emergency fund. Creating a debt-repayment plan can save you hundreds or even thousands of dollars.
Many consumers turn to methods such as the snowball or avalanche strategy. Both strategies help you focus on one account balance at a time to gain momentum and repay your debt in no time.
With high interest debt, refinancing to a lower rate, or consolidating loans can reduce your monthly payment and overall interest burden. Our loan refinance calculator and loan consolidation calculator will help you figure out how much you can save.
The bottom line
There are numerous ways to boost your monthly savings. All it takes is a little planning and preparation to begin stocking away small sums of cash. Saving for emergencies can help you prevent future financial stress. If you find you still need a little budgeting help, try the Wealth Meta Income/Spending Simulator. This simulator can help you evaluate your budget and determine areas of opportunity to save more.