Your Financial Future: Tips to Start Saving Money Now
Saving money can be difficult when you're living paycheck-to-paycheck, but there are things you can start doing that will help you have a little extra for the rainy day fund.
Investing websites like Vanguard say in order to plot your course, you first need to take stock of your finances:
Track every penny you spend for one month.
You can write it down, but Vanguard recommends using the website mint.com. It'll make it much easier to create a clear picture of where your money goes, expenses you can eliminate, and how much you can invest.
Pay yourself first by setting up automatic deductions from your paycheck or checking account into an IRA. That will guarantee that you start saving.
Vanguard recommends investing 12 percent of your salary a year. If that's not realistic, start small and increase it by one to two percent a year.
Even though a lot of people in that situation say they've already cut their spending to bare bones, Kiplinger's financial website says if your income doesn't cover your costs, then there's a good chance you're still spending on luxuries.
Find just one thing you spend money on you can do without or cut back. You'll be surprised how much that daily coffee or breakfast sandwich on your way to work costs you each month.
Contact your cell phone company. Many people pay $150 a month for data plans to operate their smart phones. Your carrier may be willing come up a cheaper plan with a few less thrills you don't use to keep you from switching to another company.
Set small, reachable goals to get started: Saving $50 a month for the next three months, paying off $1,000 in credit card balances by July, or trimming $50 a month off your grocery bill. Reaching those smaller goals can give you confidence to tackle larger ones.