Everyone always wants to know what are the secrets to save money. In fact, one of my most popular podcasts was on Saving 1K in 6 Weeks. It seems like you know that you should be saving, but you have so many questions and don’t know where to start…so like most things money related, you just don’t save.
- Do you pay off debt first?
- How much should you be saving?
- Where should you be saving?
- Is money in my retirement accounts considered savings?
- What if I save too much? (Ok, I’ve got to say, too much doesn’t exist when it comes to savings)
- What if I need to use my savings
- What’s the difference between savings and my emergency fund?
- Isn’t money in my checking account considered savings?
- How do I build savings into my budget?
- What are the secrets to save?
Over the years, I’ve collected so many favorite secrets to save that it would be impossible to share them all. Hopefully, this gets you thinking about ways to save and inspires you to get out there and save. You asked for a few of my favorites; here you go… but first, make sure you download the entire cheat sheet for all the tips.
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I decided last New Years to get a jar and collect all of our $10 bills in that jar. So, anytime we had a $10 in our wallet, we would put it in the jar. We wouldn’t count them until the end of the year. I was shocked to find out that we had saved 98 $10 bills in that jar. That’s over $980 bucks…just from saving our bills. So we took half and donated it to a favorite charity and the other half we used and went on a little weekend trip. It doesn’t have to be $10 bills…you could do $1 bills or $5 bills or even $20 bills.
Investing is one of the smartest ways to save money. Now I know, you might be thinking that with investing you are losing money. While yes, if the stock market takes a dip you could lose money. However, you are investing for the long haul, not just for today. Historically, if you invest and leave your money untouched, you will come out way ahead of those that come in and out of the market because of the market dips. This doesn’t mean that you don’t need to rebalance, or use a service like Wealthfront, Betterment, or Blooom to help you maximize your returns and minimize your losses.
A ROTH IRA is a great way to save for the future because you are taxed on the harvest, and not the seed. You see, when you contribute to your 401(k) or IRA accounts, you get a tax deduction on the seed (a small amount of money), but are taxed on the harvest (the total amount when you retire). So about 20-30%+ of your money is going away to the tax man. A ROTH, on the other hand, is reverse. You put after-tax money in the account but aren’t taxed on the harvest. Which means, you could potentially have a TON more money in your account over the long run.
Why are you paying more interest on your credit cards than you need to? Seriously, go right now and add up how much interest you pay each month on all your credit cards. Unless you have zero credit card debt, it’s likely a lot of money you are spending. This means you’ve got to get a payoff strategy in place!
Lowest Balance– Find the card with the lowest balance first. Pay minimum payments on all your other credit cards and put any additional funds that you normally would put towards these cards and lump it all on the card with the lowest balance. Pay that card off and then jump to the card with the next lowest balance.
Highest Interest Rate– Find the card with the highest interest rate and use the strategy above. Pay that card off and then move to the next highest interest rate. Although you will likely save more money on this technique, you could easily get discouraged. Most times your highest interest card is also your highest balance, which means it might take a while to pay that sucker off.
Always, though, look for ways to lower your interest rate. Call the credit card company and ask for an interest rate reduction. Transfer what you can to 0% interest credit cards and then pay off that balance first.
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