If you are struggling to build an emergency fund, save for retirement, or meet another financial goal, it might seem impossible to set aside a significant portion of your income each month. Luckily, there are several steps you can take to put more away into your saving account. These tips might help you make the final push to save half or more of your income every month.
Decreasing Your Monthly Spending
One of the top things that makes it harder to save is being in debt. It’s against all your goals. Each time you make a payment on your car, home, or other property, you have a little less to put in your savings account. If you eventually want to set aside half your income, you’ll need to reduce other spending categories, including debt. If you have loans from school, consider consolidating them into a new one with a private lender’s help. You might get a lower interest rate on the new loan, and it can make college debt more manageable. That way, you can put more into your savings account.
Sticking to a Tight Budget
One of the most critical steps to take is to plan to save money. Track each dollar down to the last cent and create a tight budget. Otherwise, you won’t know where your money is going and where you can work harder to save more. You might choose an app, spreadsheet, or notebook, but make sure you write it down somewhere. Trying to maintain the budget in your head won’t work since you need to make some calculations. When you have such a tight budget, it’s easy to see how much can go into your savings account. Do that as soon as you get your paycheck instead of spending it first. Try to avoid putting away money at the end of the month after your other expenses have been paid. This method forces you to make do with the rest of the funds.
Getting Another Job
Cutting expenses is a great place to start, but you only have a certain amount of income, and you still need to eat and pay rent. That means you need to add to your income, so you could try getting a second job. There are many virtual and part-time jobs to pick from, so it’s not that hard to pick up some work. If you picked up a couple of thousand dollars more every month, you would be on your way toward meeting or even exceeding your goal.
Work Your Way Up to the Goal
You don’t have to start putting half of your paycheck away every month suddenly. Instead, gradually work your way up to your desired amount. Instead, find out where you are currently and set manageable goals. So, if you are only setting aside 20 percent of your income right now, you might try 25 percent next month and 30 percent the next. By doing that, it will take only six months to meet your goal. In the meanwhile, look for ways of increasing your income, reducing debt, and cutting expenses.