We’ve all heard the statistics- most of us are living paycheck to paycheck, and if we lost our jobs tomorrow, the majority of us would only have enough savings for one month.
Living this way is stressful. And it also reduces our options. Many people are way overdue for a vacation, and are barely keeping their heads above water. When you don’t have any savings, you’re forced to stay in that job you hate, work for a boss you loathe, or do work that you don’t find fulfilling.
In order to have choices, you need to have some savings. If you’re hoping to get your finances sorted this year, read on for some top tips:
No one wants to hear that they need to cut back on the things they enjoy so they can save some money. But instead of decided that your social life is over, you can easily make some swaps. Instead of going out to the casino this weekend, jump on a website like or and work on your gambling skills.
Instead of going out for drinks and dancing, have friends over for a few wines and a good movie.
And instead of going to that fancy health club, where you’re paying for facilities you rarely use, ditch the membership and get some fresh air while you exercise outside. There are plenty of ways you can still do the things you love while saving some serious money.
If you don’t yet have a dedicated savings account, it’s time to open one. Look for one with high interest and low annual and monthly fees. You should easily be able to transfer your money online at the touch of a button.
Many people assume that they should be saving whatever’s left after they’ve paid for everything else, but this is incorrect. Make a budget and write down all your expenses, including bills. Pay these off, and then pay yourself- direct money into your savings account. The rest of your money is what you can use for groceries, coffees out with friends, and eating out.
Without knowing what you’re saving for, it’s easy to get fed up with living a frugal lifestyle. So it’s time to write down your goals. If you want to buy your own home, do some research into how much you’d need for a deposit. If you’re planning to move to a new city or country, look at how much you can expect to need for airfares and living expenses while you get situated. Desperate for a vacation? Shop around online and you’ll be able to see how much is will cost you.
Suzi Orman says that in order to be comfortable financially, you need at least 8 months of savings ready to go. That will cover you if you suddenly lose your job, need to move home to look after family, or have an emergency.