3 Ways to maximize Saving

There are three major steps to good money management. The first step is budgeting, the second step is saving and the third step is investing.

Starting a budget system can have its challenges in itself but saving is the most challenging part of good money management (in my opinion anyway) especially if you are living a low-income life.

One of the main reasons this can be a challenge is due to your expenses and spending habits.

If you have more money going out, then you have going in then there is no way that you are going to be able to put money aside (you can forget about having an emergency fund of 3 to 4 months).

However, this can be fixed, and changes can be made, for you to have money to put into savings.

Today I will share with you 3 ways that you can use to put as much money as you possibly can into savings.

Elimination

The first step to saving is to have money to save. In order to do this, you have to get your cost of living in a manageable state. You start by eliminating as much as you can from your day-to-day bills.

Anything that you are paying on that you do not need should be eliminated from your expenses.

There was a time when I cut off everything to have as much money that I could to save money. I am telling you all I paid was my rent, water and light bill. I didn’t have a car at the time, so I didn’t need to worry about gas or car note and insurance. I did have a cell phone bill, but my kids didn’t (they were too young at the time to have cell phones). This was one of the best times in our lives.

The reason why is with less bills every dime I made went into saving money for use to do the things that we wanted to do. I didn’t make a whole lot (I believe I made $7.50 an hour back then) I made less then 26,000 a year. Yet I nor my children wanted or needed for nothing.

Autosave

Autosave works just like Autopay. Once you start a budget that you are able to stick to and know how much money is coming and going each month. Then you should know how much you should have left after each paycheck.

To make sure you are putting money away regularly you should budget a % of your money to automatically go into a savings account each week and or month.

There is a few was that you can do this.

  1. have your direct deposit from your job spilt into two deposits. How this works? When you set up direct deposit from your job you have an amount deposited into a savings account and the rest into your checking account straight from the job. With this method you have money deposited into your savings every paycheck without you doing a thing.
  2. Schedule payments from your checking account into your saving account. You can do this for each check, or you can do it once a month. It’s just like scheduling a bill payment.
  3. Investment apps. If you use Acorn, Stash, Chime or Digit you can set an amount to go into these apps each month. You can also use their round up your change features (with this every time you shop the app will round up your change and deposit it into the app savings.)

Even though this is a great way to put money into your savings I would only use this once you are used to paying all your bills on time and eliminate as many bills as possible. You don’t want money automatically going into a savings account that you are just going to take back out. The point is to have the money going into the account and stay there.

End of the month Rule

This is a rule that I came up with so that I could stop saying I was going to save money and really started to save money.

How it works, at the end of each month or the night before my first pay check for the next month I transfer all the money that is left in my checking account at the end of the month.

By doing this I was able to cut a lot of my cost throughout the month so that I was able to have as much money as I could have left to be able to put into my saving. It also helps me with my budget plan. After a while it was like a game (I would tell myself: if you don’t have to buy anything this month you can put this much into savings). It’s a fun way to save money and cut cost if you look at it from this point of view.

Bonus

Extra money rule

with this any extra money that comes into your home get’s placed into your saving account.

Examples:

  1. Birthday money
  2. Christmas money
  3. Any money that you find
  4. Money that is gifted to you
  5. Bonus money from your job

Well, that is all that I have for today, I hope that this helps you on your journey.

Thank you for reading Everything Frugal.

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