According to a report, around 59% of Americans don’t have enough money to pay for an emergency worth $1,000. Since hospital bills could rack up to tens of thousands of dollars, it’s a significant problem. Whether you want to save up for an urgent situation or a much-needed vacation, here are three tips to build up your funds:
Track Your Expenses
If you don’t have one already, open an online checking account. If you usually pay for your groceries and bills with cash, pay using your debit card instead. Leaving a paper trail will allow you to track your expenses easier and faster. You don’t have to think about where your missing $20 bill has gone. Instead, you could just check the recent transactions on your online account. Plus, some companies provide benefits the more you use your card. You can end up saving money in the long run.
Another way to track your expenses is by using a budgeting app. The good thing about it is that you can just input your purchases and your bills, and it will show your data in graphs. This will allow you to see where you exceeded your food or entertainment budget. The problem is that it’s easy to forget the transactions, and it takes up time to fill in every detail.
Set a Goal
You don’t have to get rid of all your unnecessary expenses to build a savings fund. Instead, you can find ways to reduce or re-allocate the money you spend. To do so, you should choose a goal amount. You can start by asking yourself what you’re saving for: is it a new car or an unexpected trip to the hospital? Then choose a target date. If it’s too soon, you’re setting yourself up for failure. But if it’s too late, it might not encourage you to save, and you might end up needing the money sooner than you have imagined.
Once you’ve chosen the target date and amount, you can crunch the numbers and figure out how much money you can set aside each pay day.
Make Shopping Less Convenient
As hard as it is to save money, it’s just as easy to spend it. Buying something online is now one tap away. Subscriptions to music and video streaming platforms are the norm. Food delivery services are available at practically any time and any place. You can reduce your expenses simply by not saving your account information on the site. The extra time and effort you have to do to buy something can discourage you from impulse buys.
It can even save your account from potential fraud. You can also get rid of subscriptions that you haven’t been using. Do you really need a beauty subscription box when you already have all the lipsticks you need? If you have online book subscriptions, try looking into the services of your library. Some local libraries offer free magazines and books.
Building a savings fund doesn’t have to involve confusing math equations or difficult sacrifices. You can save money by taking small steps with a clear goal in mind. You just have to put your money where your mouth is.