As our country begins to slowly climb out of shelter-in-place quarantines, and try to get back to work, one thing that has become very clear in light of the Coronavirus pandemic is the absolute necessity of having personal savings. COVID-19 has certainly born out how critical those savings can be at times. In spite of a booming economy in 2019, almost 70% of Americans had saved less than $1,000. This included 45% of Americans who had no personal savings at all. 2019 was also a year when many people took on high debt loads -- partially due to a promising economy and low-interest rates, which made it easy to secure loans.
Whether you have thousands of dollars in debt or none at all, you could probably save a little more money. Here are a few tips to make it happen this summer:
Start With a Budget
Did you know that 60% of Americans do not have a budget in place at all? This is because many people don’t know how to create one. The best starting point is reviewing your current expenses and tracking where you spend money. From there, you can begin to identify and trim unnecessary incidentals. Ideally, your savings should represent a minimum of 10% of your income every month, but of course, if you’re able to manage more than that, then do so. Also, remember to include debt payments when budgeting.
Make More Money
No matter how much money you make right now, you would benefit from a little more. If you have more time than usual on your hands, put it to good use. If you’re not interested in taking on a side job, there are other options available. Start going through your attic, garage, and that junk drawer you never check. You might be surprised at all the valuables you no longer have use for that someone else might buy via OfferUp, eBay, or Amazon, for example.
Double-check the prices of everything you’ve been buying and see if you can get discounts or find better alternatives. Is your supermarket the best option for price savings or just the closest one? Currently, gas is cheap, so driving a few extra miles might be worth it. What about your car insurance? Take advantage of recent price cuts in rates from insurance companies. Interest rates are dropping right now, so if you can qualify to refinance a loan or two, consider that as well.
Buy Store Brands
Speaking of shopping around, it’s time to reconsider some of the brands you purchase. There are many great store-brand products from Kroger, Target, Walmart, and other chain supermarkets that help you save money and rack up savings. They may not necessarily all be the same quality, but decide on what you’re willing to compromise and then go from there. You might need to do some experimenting to see what you like. Finally, don’t forget to look at what your local dollar store has to offer.
Start going through the subscription list you currently have. People who frequently check their cards for monthly subscriptions often find some they didn’t even remember signing up for. This is especially common for businesses, so if you own or manage one, check the company accounts too. Get rid of all the subscriptions that you don’t use at least once per week. You might also be able to convince companies to pause a few subscriptions instead of canceling them. Either option can boost your savings.
Consume Less Energy
Heating and cooling a home are among the biggest expenses homeowners and renters pay. Thankfully, there are several options you can consider to reduce these costs. Here are a few:
- Invest in solar panels for the roof or solar-powered generators to charge devices.
- Close your blinds and curtains to keep out the summer heat.
- Dry the laundry outside if there are no local ordinances against it.
- Cook outside when possible to reduce heat buildup indoors.
Choose Better Savings Options
Money has a time value and suffers from inflation, so it’s important to choose accounts and investment opportunities that give you high returns. Use high-interest accounts for money you might need to access in a pinch. If you’re able, consider investing money you can afford not to touch for the next few years in stocks, bonds, and mutual funds. Also, take advantage of employer-matching for retirement at work. This might help your money grow in pace with inflation so it retains its value.
Consider what has transpired in the last few months with Coronavirus. Likely we have all been financially impacted in some way, so consider making some changes in financial habits starting this summer, and try to build up those emergency savings. Implementing some of these tips can help you do that.
At Financial Rescue, we help you eliminate one of the biggest obstacles to your ability to save and invest: debt. Wouldn’t you like to put the money you spend on debt into a savings account instead? Contact us for information on our debt and tax relief services today.