Saving Money Made Simple
Saving money is never easy. That’s because there is never an ideal situation to save money. Some people are just graduating and starting their own lives, possibly with a lot of debt. Others (like me) might have established careers, but they also have homes and children—both of which suck away extra change quicker than a couch cushion. Then, there are the empty nesters and retirees who struggle between enjoying this season or not squandering their fixed income. Luckily, through trial and error, I’ve discovered some easy ways to save money without even missing it.
Here are four easy steps that will help you save money every month, without having to drastically adjust your lifestyle:
Start a budget. In my opinion, the best way to save money is to account for every dollar that is spent. This can be hard to do since many of us swipe check cards and pay bills online. That’s where a budgeting app can help out tremendously. My husband and I use EveryDollar, which we can access from our phone apps or online.
We use the free version and are pleased with the various categories and features it offers. Once you set up your initial account with projected income and expenses, it’s a breeze. Simply update the budget each month to account for differing expenses. This helps us plan for months where we might spend some on travel or have to pay an added expense like car insurance.
Every time you make a purchase, log it into the app in the correct category. This may sound like a lot of trouble, but it takes no more time than sending a text. You can also adjust expenses and categories as you go. Since I work freelance, I adjust my income each month every time I get paid from another employer. At the end of the month, you can see what money you made but didn’t spend and put that into savings.
An added bonus is that you can help track where all of your money is going. This makes it easier to identify where you might be overspending. Bad habits are sometimes hard to break, but they are even harder if you don’t know about them. A budget will identify all of these gray areas that make you ask, “Where did all of my money go?”
Consider a 15-year mortgage. It seems like 30-year mortgages are the norm, and that’s fine. Most people like the thought of having a lower monthly payment. I initially thought cutting my mortgage term in half would double the payment, but that isn’t true. My husband and I are in the process of purchasing our second home, and both times we went with the 15-year option. The monthly payment is more, but not that much more. Plus, we will save a ton of money in the long run.
Just think about it. By halving the payment period, we are saving thousands of dollars in taxes and interest fees. We also get a lower interest rate at 15 years, because it means the bank doesn’t have to put as much into our loan either. By doing this on our first home, we built equity quicker and walked away with a nice down payment to put toward our new home.
If you have a 30-year mortgage but wish you had a 15-year mortgage instead, it’s not too late. Watch the interest rates, and refinance when they are at a low point. Even though we already had a 15-year mortgage, we refinanced a few years ago when the rates dropped significantly. It didn’t cost much to do and lowered our monthly rate by about $300.
Cut out car payments. The newest car in our family is 10 years old. I know that doesn’t sound glamorous, but hey, it saves us money. New cars are great, and I’ve owned some in the past. But the older I get, the more I enjoy money in my pocket verses the trill of riding in a shiny new vehicle with all the bells and whistles. There’s also the lingering thought that as soon as a car leaves the lot it severely dips in value.
Older cars work for us because my husband is a great mechanic, and we don’t mind riding in used vehicles. Before purchasing a new (to us) car, we research some of the makes and models we like. There is actually more information online concerning recalls and other common problems with used cars, since they have been around for a while.
I know some people who simply feel more secure in newer vehicles, although new cars can break down as well. If that’s you, then it’s wise to buy a newer, but not brand new, car. You can still save a lot of money that way. And if you must make payments, it’s smart to have only one car payment at a time.
Have planned fun. I am a planner to the extreme and can get a little carried away with it. Whether going out to a nice dinner out or having friends over, I like to “plan my fun,” as my husband says. I know I take it to the extreme, but it does help to plan out big fun that will cost you big money. Maybe you have enough disposable income to jet off on a luxury vacation with no plans. But I have a feeling you are more middle class like myself, or else you would not be reading this article.
In that case, a plan should be put in place. I have friends who started Disney jars and encouraged their kids to help save toward the family trip. My husband and I like to plan out when we will take a trip, big or small, and set money aside for it. Like me, you might find that planning can be fun. You will get excited thinking about your future trip and planning out all the details as you save for it. Then, when the time comes, you will have all the expenses covered and can enjoy that trip worry free.
About the Author: Kaci Lane Hindman can best be described as an unconventional Southern Belle with a sarcastic sense of humor. She loves Alabama, writing, and writing about Alabama. She is married to the walking definition of a high-tech redneck, and they have two young children.
