Unexpected expenses can occur at any moment. These expenses can cause you to go into even more debt as you attempt to pay them and keep your home or your business afloat. For this reason, creating a healthy amount of savings should be a priority. Below, you will find a few tips to help you refocus your budget to help boost your savings.
Track Your Spending
One way to refocus your budget so that you can add more money to your savings account is to learn how to track your spending. This can be accomplished in numerous ways. If you happen to frequent the same store weekly or biweekly, then track your spending at those stores. There are smart device applications you can download that will help you set a dollar limit per store so that you don’t overspend. By making use of some handy apps, you can effectively track your spending habits and promote personal savings.
Another method to track your spending is to use two different bank accounts. Dedicate one account to holding your savings and a second account to bills, business necessities, and house expenses. Making vague spending budgets and goals does not actually stop excess spending at home or in business. By tracking purchases in real time, and effectively evaluating where your money goes, you’re better able to wrangle excess spending and create a proactive budget. Both of these methods will ensure that you’re more mindful of your spending habits.
Reduce Your Monthly Expenses
A great way to help increase your savings is to reduce your monthly expenses. You can start by reducing your spending on extras, such as food or personal items that are not necessities. Examples of these are take-out food, expensive gourmet coffees, excess business supplies, and unnecessary personal accessories. If your kids are attending private school, check to see if there are any high-quality online public schools available in your state — they often offer a comparable education to private schools without the expense. Other swaps you can make include exchanging your gas-guzzling car for a more economical vehicle, eliminating excess extracurricular activities, reducing your phone plan, and consolidating your debt payments.
Once you’ve reduced your extra spending, you can begin to make reductions to your necessary spending. Fortunately, monthly bills can be reduced in a few ways. For utilities, you can be more mindful of how your electricity and water are used in your home and/or business. Turn off lights you are not using and implement water-saving practices into your everyday life. When it comes to reducing the cost of your monthly mortgage, it might be wise to speak to your bank about available refinancing options to help reduce your monthly payments. Taking these steps will make a significant difference in how much money you’re able to put away in savings. You may even be surprised by how much money you spend on needless or overpriced items.
Manage Your Insurances
As a responsible adult, you’re going to have multiple types of insurance to protect yourself and your property. Purchased separately, your insurance policies can add up to a hefty chunk of your monthly income. Consider reducing your insurance premiums by combining different insurances into one policy. Most insurance companies sell policies that protect both individuals and business owners. Combining your personal and business policies during the infancy of your business can help reduce your monthly premium and add to your savings every month.
In addition to combining policies, you can also look for upgrades around your home and office that will reduce your monthly insurance rates. For example, certain home security providers include homeowner’s insurance certificates that may reduce the cost of insurance. Having added protection for your home and cost savings is truly a win-win.
While saving money may seem impossible at times, it is achievable when you implement some of these budgeting techniques. By tracking your spending, reducing your expenses, and managing your insurance policies, you’ll be well on your way to having a bigger savings account. With all these savings, be sure to place your money into a savings account with compound interest benefits.
To learn how to better take care of your financial future, check out our webinar program for financial literacy!