With so many Americans suffering from lack of funds in their savings accounts, the lingering question remains: what is so complex about saving money? From Atlanta to the north and even on the west coast, people are struggling with money. Truthfully, the basic concept of saving money isn’t complex at all, but certain factors can make it seem that much more difficult; especially if you’re not well-versed in finances. Here’s how to stop worrying and simplify your savings.
Stop Overthinking It
We’re all likely guilty of overthinking our savings efforts. It can be difficult in a world full of financial noise to get a moment of silence in order to properly reflect on our financial situation and set appropriate goals. Gurus will tell you to “just do it”, money apps will show you all kinds of numbers, and friends and family will offer all manner of advice on the subject. The bottom line is that you’re probably overthinking what it takes to save money.
The basic premise of saving money is simple; you save what you can when you can, and reduce your expenses (including debt) by as much as possible every single month. This can seem pretty daunting if you’re living on a fixed income or paycheck to paycheck, but it is still possible.
You can enlist the help of your bank to withdraw savings automatically from your deposits or bank account on specific days of the month. This will eliminate the need to manually put money into savings yourself (which often leads to overthinking or excuses for why you need that new TV).
Eliminate Debt ASAP
If you really want to simplify saving money, you’ll need to start at the source of your financial woes; your debt. An article published at Marketwatch.com in February of this year claims that “A growing number of Americans have more credit card debt than savings.” Let’s allow that to sink in for just a moment. This means that there are people out there struggling to get by who have more credit card debt from interest rates and purchases than they do in their savings account.
Eliminating debt is truly the best way to simplify savings and your overall financial picture. Debt can be a huge weight on your shoulders, both metaphorically and physically. The stress caused by crippling debt can affect your performance, your confidence, and most importantly, your chances of securing a stable financial future.
The sad fact is that things like credit card debt are usually due to purchasing things we don’t actually need. While some will say this is a matter of opinion (and it is), there’s something to be said about taking a step back and asking yourself if you really need that new wristwatch or iPhone. We tend to spend money on things that depreciate in value as soon as we buy them rather than on things that will hold financial or sentimental value.
For the price of a new iPhone, you could make new memories with a road trip or vacation. For the price of your new TV, you could easily plan several outings with friends and family. It’s not how much something costs that gives it value, it’s how much you actually earn from that purchase that determines the value of what you spent. Value isn’t always monetary!
Have a Plan
You won’t get anywhere in saving without some kind of direction. Having a plan will provide you with guidance should you stray from the path; giving you something tangible to work with as you pursue your savings goals. Sometimes, it’s just good to be reminded why you started in the first place, even if it’s just a simple list of goals you wrote down a few months back.
Luckily, there are experts available who specialize in financial planning and advisory. With an advisor at your side, you’ll get professional help planning out investments and other finances so you can maximize your savings and minimize needless spending. Use the Careful cents site to compare the best financial advisors in your area so you can pick one that’s right for you.
Use Finance Apps to Help
With thousands of apps that perform just about any function you can think of available, it only makes sense that there would be apps to help you take control of your finances and simplify saving. Apps like Mint and You Need a Budget will help provide you with a financial picture that is clear and precise while giving you access to expert advice on saving and budgeting to help you reach your goals.
If you don’t want to pay a financial professional, a finance app can be a good alternative. While it won’t necessarily replace the solid advice of a long-term advisor or planner, it will certainly help you paint a better picture of your finances and where you need to start reducing your spending.
Reduce Your Spending
At last, we come to the final point of this article, and perhaps the most difficult of all the tips to follow: reducing spending. Let’s not shy from the fact that spending money is fun. There’s a certain level of exhilaration we get when exchanging money for our favorite goods or services, and that can be pretty difficult to fight; even at the best of times.
As much fun as spending money is, it’s probably the biggest factor holding you back from your savings goals. Even the smallest of expenses add up over time, and you’ll find that your $9 lunch at McDonald’s every day quickly becomes one of your largest monthly expenses (that’s $270 for 30 days!). Reducing spending starts with taking a step back from the items you want and waiting a full day before considering the purchase again. This will give you time to think, and to ask the ultimate spending question: “Can I afford this, and do I really need it right now?”