The average American household has saved $8,863. Single adults in their 30s tend to have the least amount, with an average of $2,729. While older adults between the ages of 35 and 44 tend to have the most with an average of $10,399.
If you haven’t saved this much yet, don’t panic. You still have time to put money away. This guide will give you some tips for making saving up easier.
1. Make a Budget and Stick to It
The first step in saving is knowing exactly where your money is going. Creating a budget helps you to identify wasteful spending. It also helps you create a plan where you have money left over for saving.
Start with bills and required living expenses. Then factor in more sporadic bills and entertainment spending. Decide how much you want to save each month and factor that into your budget.
Don’t feel like you have to save a lot of money to make a difference. Even if you save $10 a month, you’ll have $120 at the end of the year.
2. Pay off Your Current Debt
If you find that you don’t have much money left over at the end of the month, then it’s time to focus on paying off your debt. Then once you pay it off, try not to create new debt.
You can then use the money you would pay to your creditors to increase your savings. There’s an added benefit to this; paying off your debt also increases your credit score, which will help with getting instant approval for credit applications.
3. Create a Goal
Create a solid and quantifiable goal for yourself. Saying that you want to save money isn’t enough. Create an attainable goal for yourself, such as $500 or $1,000.
Then once you reach your goal, you can set a new goal for yourself. This could be to start building a 401K or HSA account. Now you’ll have money set aside for emergencies, medical bills, and your retirement.
4. Put Your Money in the Right Place
Do some research and put your money in an account that earns interest. That way, your money builds on itself. Most major banking institutions offer savings accounts, but the interest rates are low.
Instead, you can look online for a reputable and insured banking service. These are often referred to as high yield savings accounts. There are other investments and saving options, but with this type of account, your money is readily accessible should you need it.
If you’re sure you won’t need money, then you could put it in a CD. They tend to have slightly higher interest rates, but you can’t touch the money for several years.
Start Saving Up
With these simple tips, you can start saving up. That way, you’ll have a safety net for the future. This will reduce the need for you to depend on credit cards.
Start by making a budget and determining what you can afford. Then create a goal for yourself and stick to it. Then once you achieve your goal, set another one.
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