Saving money takes diligence, but saving consistently over time is well worth it! As a financial representative for Modern Woodmen of America, I help members plan for all stages of life – and the path to financial security often starts with saving.
Here are a few tips to get started.
Budgeting basics
Start with solid budget – then stick with it! I recommend the 50/30/20 budget as a guideline:
- 50% of your income goes toward necessities, like housing, bills and groceries.
- 30% goes to wants, like dining out and entertainment. Going over budget in wants can quickly negate any savings.
- 20% goes to savings and debt payments. Having an emergency fund with three to six months’ worth of living expenses can prevent you from going into debt to cover unexpected costs.
Earn extra income
A side gig, freelancing or monetizing a hobby can create extra cash flow. Starting small, with a few hours a week and scale up to a level that won’t affect performance at your primary job.
You can also opt to rent out unused space (extra rooms, parking spots or storage areas) as passive income. Listing services like Airbnb, RV Share and Neighbor allow you to easily list and manage these rentals.
Shop smart
Buying store brands, generic prescriptions and items on sale are classic ways to save on groceries and household items. Meal planning, creating a grocery list with only essentials, and not shopping while hungry are other ways you can further decrease costs.
Buy perishable items in bulk and freeze extras to prevent food waste. Leverage coupons, promo codes, loyalty programs, discounted gift cards, and cashback sites for savings on regular purchases and big-ticket items. And sign up for newsletters and email alerts from favorite brands to receive deals and sales announcements.
Reduce monthly expenses
Call service providers like cell phone, cable/internet, and home and auto insurance providers to request lower rates. Even a $10 less per month per service adds up.
Eliminate unused subscriptions and memberships, including canceling trials before you’re charged. And switching to lower-cost alternatives – like a streaming service instead of cable or a budget cell phone plan – often covers the your core needs.
If you’re eligible for subsidy programs like Medicaid, SNAP or LIHEAP, use them to gain additional savings on medical, food and utilities.
Leverage your home
Tapping into your home equity by refinancing can help you consolidate high-interest debts and lower your monthly mortgage payments. You can also use equity to help finance home renovations that increase property value.
Take advantage of rebates and tax credits when making energy-efficient upgrades. You can also lower your utility costs, and regular maintenance protects your investment and prevents costly repairs over time.
Invest wisely
Use windfalls like tax refunds, inheritances, work bonuses or cash gifts toward investments. You’ll generate returns over time and grow your net worth. Plus, by consistently contributing even small amounts to 401(k), IRA or other retirement plans allows you to take advantage of compound interest.
Workplace retirement plans often come with matching contributions from your employer; make sure you’re allocating enough to get the full match!
You can further optimize your investing through low-cost mutual funds and exchange-traded funds (ETFs) over pricier, actively managed accounts.
Don’t forget, without appropriate health, life, disability, home and auto insurance, all your savings efforts can quickly be derailed. Talk with your financial representative to ensure your progress is protected.
* Securities and advisory services offered through MWA Financial Services, Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC. Investing involves risk, including the possible loss of principal invested.
