By Eric Reich
We all know we need to save money, but many of us also struggle with it. Why do we find it so hard to save? For starters, saving isn’t exactly fun. I’m not so naive as to think that you all love to save. While saving can be made to be fun, it typically isn’t in the face of options like a new car, iPhone, vacation, the list goes on. This week, in honor of National Savings Day (yes, apparently that’s a real thing) , which was this past Saturday, Oct. 12, I compiled a list of different ways you can save money. Find the ones that most appeal to you and stick with them. You will be amazed at how fast your savings can grow.
- Make it automatic. For me, this is by far the easiest way to save. With a spouse, three kids, a business and countless other financial responsibilities, the easiest way to save is to never see the money in the first place. Don’t forget to also make the increases automatic in the amount you save as well. If you contribute to a 401(k) or other retirement plan, every time you get a raise of less than 5%, add another 1% to your plan. A raise of 5% or more, add 2% more to the plan. This is the cheat code to making your saving balloon quickly.
- Create a budget. After you factor in your savings which always comes first, you can budget your expenses with what is left over. If you try to do it the other way around, you might run out of money before you get to save. Save first, then spend.
- Track what you spend. You might be shocked at the difference between what you think you spend, and what you actually spend. I know I was. I do this exercise regularly to get my hands around what I actually spend each year. Some years, I have to pick myself up off the floor, but as long as I immediately get back on track I can move past a year with high expenses.
- Cut expenses if you find that you are spending too much. Sign up for apps like Rocket Money that show you all the recurring subscriptions you have and what they cost. They can even help you cancel the subscriptions.
- Watch the amount you spend on takeout dinners. I am totally guilty of this. With fast-paced lives, cooking isn’t always an option. Try to plan ahead and make multiple meals when you do have the time. This makes “What’s for dinner?” less painful to hear from your kids every night.
- 48-hour mandatory wait on all big purchases. I never buy something I really want on the spot. If I really want it and take 48 hours to think about it and still want it that bad, then fine. Otherwise, it was probably just an impulse buy which is rarely a good idea.
- Price shop. Price shop for literally everything. Cars, food, medicine, and almost everything you buy. It can probably be found cheaper somewhere else.
- Ask for a raise. This is an easy way to increase your available savings, but we rarely do it. Just be prepared with a list of reasons why you deserve it, don’t just go in and ask because you want more money.
As you can see, there a ton of ways to save, and this is only a few of the many options you have. The key is to just take the first step.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
Eric is President and founder of Reich Asset Management, LLC. He relies on his 25 years of experience to help clients have an enjoyable retirement. He is a Certified Financial Planner™ and Certified Investment Management AnalystSM (CIMA®) and has earned his Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®) designations.
