OMG Digital Magazine | 321 | Thursday 9 August 2018 • PAGE 22
Business
8 simple ways to save money
Sometimes the hardest thing about saving money is just getting started .
It can be difficult to figure out simple ways to save money and how to use your savings to pursue your financial goals . This step-by-step guide to money-saving habits can help you develop a realistic savings plan .
Record your expenses The first step to saving money is to figure out how much you spend . Keep track of all your expenses — that means every coffee , newspaper and snack you buy . Ideally , you can account for every penny . Once you have your data , organize the numbers by categories , such as gas , groceries and mortgage , and total each amount . Consider using your credit card or bank statements to help you with this . If you bank online , you may be able to filter your statements to easily break down your spending .
Make a budget Once you have an idea of what you spend in a month , you can begin to organize your recorded expenses into a workable budget . Your budget should outline how your expenses measure up to your income — so you can plan your spending and limit overspending . In addition to your monthly expenses , be sure to factor in expenses that occur regularly but not every month , such as car maintenance . Find more information about creating a budget .
Plan on saving money Now that you ’ ve made a budget , create a savings category within it . Try to put away 10 – 15 percent of your income as savings . If your expenses are so high that you can ’ t save that much , it might be time to cut back . To do so , identify non-essentials that you can spend less on , such as entertainment and dining out . We ’ ve put together ideas for saving money every day as well as cutting back on your fixed monthly expenses .
Tip : Considering savings a regular expense , similar to groceries , is a great way to reinforce good savings habits .
Choose something to save for One of the best ways to save money is to set a goal . Start by thinking of what you might want to save for — anything from a down payment for a house to a vacation — then figure out how long it might take you to save for it . If you need help figuring out a time frame , try Bank of America ’ s savings goal calculator .
Here are some examples of short- and long-term goals : Short-term ( 1 – 3 years )
• Emergency fund ( 3 – 9 months of living expenses , just in case )
• Vacation
• Down payment for a car
Long-term ( 4 + years )
• Retirement *
• Your child ’ s education *
• Down payment on a home or a remodeling project
* If you ’ re saving for retirement or your child ’ s education , consider putting that money into an investment account such as an IRA or a 529 plan . While investments come with risks and can lose money , they also create the opportunity for compounded returns if you plan for an event far in advance . More details in step No . 6 below .
Decide on your priorities After your expenses and income , your goals are likely to have the biggest impact on how you save money . Be sure to remember long-term goals — it ’ s important that planning for retirement doesn ’ t take a back seat to shorter-term needs .
Prioritizing goals can give you a clear idea of where to start saving . For example , if you know you ’ re going to need to replace your car in the near future , you could start putting money away for one .
Pick the right tools If you ’ re saving for short-term goals , consider using these FDIC-insured deposit accounts :
• Savings account
• Certificate of deposit ( CD ), which locks in your money at a specific interest rate for a specific period of time
Learn more about Bank of America savings accounts . For long-term goals consider :
• FDIC-insured individual retirement accounts ( IRAs ), which are tax-efficient savings accounts
• Securities such as stocks or mutual funds . These investment products are available through investment accounts with a broker-dealer . Remember that securities , such as stocks and mutual funds , are not insured by the FDIC , are not deposits or other obligations of a bank and are not guaranteed by a bank , and are subject to investment risks , including the possible loss of principal investment .
Make saving automatic Almost all banks offer automated transfers between your checking and savings accounts . You can choose when , how much and where to transfer money to , or even split your direct deposit between your checking and savings accounts . Automated transfers are a great way to save money since you don ’ t have to think about it and it generally reduces the temptation to spend the money instead .
Watch your savings grow Check your progress every month . Not only will this help you stick to your personal savings plan but it also helps you identify and fix problems quickly . These simple ways to save money may even inspire you to save more and hit your goals faster .