Do you remember the moment when you ripped open your first paycheck and saw the harsh reality that it’s just not enough money? Learning the difference between gross and net pay, setting up a budget to cover bills, finding ways to curb expenses. All of these are jarring lessons in “adulting.”
Just as important is learning how to save. A 2018 survey from Northwestern Mutual found that 46 percent of Americans have not taken any steps to prepare for outliving their savings. An additional 21 percent have nothing saved at all.
How to save when your net income is meager
How can you save today while still covering your bills? Here are some ways to feed your piggy bank without falling behind:
- Build your budget. Take the time to calculate what’s coming into your wallet and separate the “needs” from the “wants.” Drafting a budget — on paper, computer or through an app — puts all your numbers in one place and helps making financial decisions easier.
- Look at where your money is going. What can you cut from your lifestyle? Perhaps limit dining out or live without your HBO or Netflix subscriptions or making coffee at home instead of going to Starbucks. Making small, simple lifestyle tweaks can add up quickly.
- Clip those coupons and gain reward points. Shop for deals — whether online or in stores. Sign up for reward points from stores, hotels or any place that you frequent to get money back. Make sure that your credit cards are rewarding you for being their customer by researching credit cards that provide cash back and have no annual fees. The more you take advantage of the freebies out there, the more money you can put back in your savings.
- Keep a piggy bank (yes, really). It may sound silly, but keeping an actual, physical piggy bank (or a spare change jar) to deposit loose change can really add up.
- Negotiate your current subscriptions or bills. Call the companies you pay regularly — cable, auto insurance and phone — to ask what deals may be available to loyal customers. Don’t be afraid to shop around to find better rates that will save you cash.
Grow your disposable income
- Pay off or consolidate your debt. Student loans? Credit card bills that keep rolling over monthly? Work on a plan to consolidate your debt and pay it off. The monthly interest you’re paying is costing you in the end. Reach out directly to creditors or work with a consolidation expert.
- Refinance high-ticket items. Check in with your mortgage company to look for options that can re-finance your home and cut down on monthly payments.
- Consider a second job (aka side hustle). Are there things you love to do, that can give you a profit? Perhaps you are a task-driven person – companies like TaskRabbit pair “taskers” with people that need help. Consider hobbies that can generate additional money. Things that you love to do may become profitable through Etsy or other websites. Don’t limit yourself to your workday gig.
- Consider bankruptcy if you have too much debt. It can seem impossible to save if all of your income is going out the door each month to service debt. Wipe the slate clean and get a fresh start on your budget.
Feed your piggy bank!
No matter what tips you follow, remember this: You’re investing in the most important thing – your future. Decreasing your bills or increasing your income doesn’t mean you have more money to spend. Save that income instead, because you never know when you’re going to need it.