5 Simple Ways For Families To Save Money

Sometimes the hardest part about saving is just getting started. This step-by-step savings guide will help you create a simple and realistic strategy to achieve all your short-term and long-term savings goals.

1. Track Your Costs

The first step to starting savings is to figure out how much you are spending. Track all costs. That is, keep track of all your coffee, household items, and tips. Once you have the data, organize the numbers into the following categories:

Gasoline, groceries, mortgages, and the sum of each amount. Use your credit card and bank statement to make sure they are correct. Please do not forget.

Tip: Find a free expense tracker to help you get started. Choosing a digital program or app can help automate some of this task. Bank of America customers can use the mobile app or the Spending & Budgeting tool to automatically classify transactions for easy online budgeting.

2. Budget Savings

Once you know what you're spending in a month, you can put your tracked spending into a viable budget. Your budget should show how your expenses are compared to your income-you can plan your expenses and limit overspending. Includes costs that occur on a regular basis but not monthly such as car maintenance.

Tip: Build a Savings Category-Aim to save 10 to 15 percent of your income.

3. Find A Way To Reduce Your Costs

If you spend too much and can't save as much as you need, it may be time to cut. Identify low-cost, unwanted things such as entertainment and eating out. Look for ways to save on fixed monthly costs, like TVs and mobile phones.

Here are some ideas for reducing your daily expenses:

• Use resources such as community event lists to find free or low-cost events and reduce entertainment costs.

• Cancel unused subscriptions and memberships (especially for automatic renewals).

• Promise to eat out only once monthly and try places that fall into the "cheap meals" category.

• Give yourself "time to think": If you want to make unnecessary purchases, wait a few days. Maybe you're glad you passed-or are willing to save for it.

4. Set Savings Goals

One of the best ways to save money is to set goals. First, think about what you want to save for-maybe get married, plan a vacation, or save for retirement. Then calculate how much you need and how long it may take to save it.

If you're saving for retirement or educating your child, consider putting that money into an investment account such as an IRA or 529 plan. Investing is risky and you can lose money, but it also creates opportunities for growth as the market grows. It may be appropriate if you plan your event in advance.

Tip: Set small, achievable, short-term goals for something fun and big enough that you probably don't have the money to pay for it, such as a gadgets or Christmas gifts. Achieving smaller goals, and enjoying the fun rewards you save, can give you a psychological boost, which makes the rewards of savings faster and strengthens your habits.

5. Set Priorities

After your expenses and income, your goals will probably have the greatest impact on how you allocate your savings. Be sure to think about your long-term goals. It is important that retirement planning is not second only to short-term needs.

Tip: Learn how to prioritize your savings goals so you have a clear idea of ​​where to start your savings. For example, if you know you need to replace your car in the near future, you can save money now.

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