Having enough money for the things you want in your life can be a challenge sometimes, especially if it’s something really expensive such as a car, down payment, college fund, etc. It’s a good idea to know how to save money for the things that you want in your life, and even some other things you might want to keep money for such as a retirement account or an emergency fund. So how does one go about saving money fast?
Establishing the Amount and the Timeline
When deciding to save money, the first thing you need to decide is exactly how much you need to save and when you need it by. For example, if you were planning to buy a car without any car loan for Christmas and it is now May, you know that you have 7 months to save up enough to buy it straight with cash. If you know you want a used car for about $5000 and you have 7 months to save up, try putting away $720 each month, or about $340 if you get paid every two weeks. It is really up to you how you decide to save or how often but the easiest thing to do is to put a little bit away each time you get paid so it is consistent and has the potential to add up quickly.
Making Sure Your Savings Goals are Attainable
Although saving $720 each month sounds good in theory, for many of us it’s not very realistic. The best thing to do is to figure out how much you can afford and make sure it corresponds to how much you need and your specified timeline. Don’t set goals that are too high or you’ll just feel disappointed when you can’t achieve them. Set a realistic amount that you can save into a separate account every pay check. If you need to save money fast and you need to set aside more you can afford, it’s time to get another stream of income or cut down your expenses.
Cutting Down on Expenses
The next thing you want to do it to try to cut out the little things you can get by without such as your morning latte, expensive brand name clothes and food and extra cable or satellite. If you need to cut down on larger things think about car pooling or getting a smaller and less expensive place to live. A good tip I like to use when trying to save money fast is asking myself, “Do I really need this now?” before I buy anything. It’s just one simple question, but it can make a huge difference when it comes to buying unnecessary items. It’s also helpful to carry around a small notebook and write down everything you buy, so you become more aware of what you’re actually spending (especially if you’re using a credit card to make the majority of your purchases). This way there will be no surprises at the end of the month when your statement comes in. It may also help to carry around cash if you’re trying to budget your expenses. This way when you run out of money in your wallet, you know that you have to wait until you get more money before you can spend again. This is also especially helpful if you are also trying to trim down your credit card while saving money up.
Another Stream of Income
If cutting down expenses still isn’t allowing you to save up as much as you need as quickly as you need it, maybe it’s time to look into getting another stream of income. Start looking for another job, even if it’s just a couple evening or weekend shifts per week; you’ll really see a difference when your next pay check rolls around. You can put all your extra money straight into your savings account and maintain your current lifestyle with the income you are currently receiving. The downside of this is that it is usually only a temporary solution; most people can’t keep two jobs for extended periods of time. If you can’t get a second job for whatever reason, think about selling off some of your old things to help you get some extra money to save now. Old jewellery, appliances, even some clothes can be put up for auction at Ebay for a decent amount of money. If you have any old coins lying around (even if they’re tarnished), Google them and see how much they’re worth. You may be pleasantly surprised with some of your findings; this can help you save money even faster.
Opening a Savings Account
If you haven’t already done so, open up a savings account. It will so much easier for you to save money properly when it is in a separate place form your spending money. Every pay check, put the amount of money you are saving up right into your savings account to avoid any confusion later on. Set up your online banking so that a particular amount goes straight into your savings every two weeks (or however often you want to save your money). Then it’ll be automatically done for you so you won’t have to worry about it at all. Alternatively, if your pay check fluctuates every time, you can do a little trick I do. Anything that isn’t a full $100, I put straight into my savings account. It’s as simple as that. If I get $616 one week, I’ll put $16 into my savings account. If I get $687 another week, I’ll put $87 right into my savings account. You won’t really notice the little change, but it’ll add up to some serious money if you keep at it. Keeping your money in a savings account can definitely help you to save money fast.With a savings account, you’ll also get interest on any funds kept so it’s an extra little bonus on your savings.
Reassessing Your Plan
Even though we’d like to save money fast, it’s always a good idea to go back and reassess your original goal. As you go through the next few weeks, you’ll see if your savings plan is sufficient or if you need to modify it. Are you saving too much money and not being able to buy necessities? Do you have more things you could cut back on in order to save more? Sometimes your first plan doesn’t always work out as well as it does in theory so it is important to go back and reassess your goals in order for it to be practical as well as efficient. If you’re using the automatic method that puts money right into your savings account every pay check, you can always put more money in manually if you find you have some leftover.
Putting Away Your Change
Even though you have a plan to put a nice chunk of money right into your savings account every couple of weeks, start keeping track of your change as well. Anytime you have anything smaller than a 20 dollar bill in your wallet, put it in a jar or piggy bank. This works great if you are already using the cash method. You won’t even notice a few dollars every week, but it can definitely add up over time. Once your piggy bank reaches a decent amount, like $100, deposit it into your savings account and start over again. This acts as an extra bonus to your savings and will help you achieve your savings goals even faster. As an extra reward, put away the money you end up saving on your day to day expenses in your savings account. For example, if you generally spend $200 on groceries and now by buying only brand name foods, bulk and things that are on sale, you end up only spending $168, put the remaining $32 in your account. If you focus on saving money fast with all the small things, you can see how much you are actually saving instead of spending that extra money on something else. For example, I learned to cut my own hair, and now every time I give myself a trim, I put $60 into my savings account since that’s how much I would have spent otherwise on a hair stylist.
Being Consistent
The last thing you need to know about saving money fast is to do it on a regular basis over a long period of time. It’s best to get into the habit of saving money right from the beginning and keep doing every pay check to get maximum results. If you only do it at the beginning and then stop, you will never be able to save up the amount of money that you’re trying for. Even if you just start small it adds up rather quickly, so keep saving money each and every pay check. Don’t get discouraged if it’s not adding up as fast as you’d have hoped and sometimes things come up and you aren’t able to put away as much as you hoped; brush yourself off and start over. It’s never too early to start getting your financial plans in order, and it’s better to start now than later, and even if you do come across a few setbacks on the way you’ll still come out ahead later on; keep saving even if you don’t want to; it’ll pay out in the long run.
The image used in this post is taken from Image: Ambro / FreeDigitalPhotos.net
