This article will showcase how to save money for different events in your life. More frequently than ever, there are testimonies on how people have saved a large amount of retirement from modest earnings.
This is so fascinating because you will encounter stories on how someone makes above six-figures and hardly making ends meet The differences in the two scenarios is the ability to implement effective methods on how to save money.
How to Save for Retirement
The idea of saving for retirement is sometimes an after-thought. The power of compounding interest has created modest earners into millionaires. The best-known figure who has used this method is Warren Buffet. Below are the best ways to save
- Participate in 401(k) – do not leave money on the table from your employer
- Contribute to Your in IRA – there is a maximum amount per year to contribute
- Tax Deferred – qualify for tax breaks (defer paying taxes until withdrawal)
- Reduce Your Brokerage – understand and reduce your brokerage fees
- Withdrawals – avoid early withdrawal because this creates additional penalties
- Automation – automate your savings and any amount is a good amount
- Diversification – invest in low index fund, it has great a diverse portfolio
- Dividend Stock – participate in dividend stock (some live off dividend income)
- Real Estate – convert a bedroom and rent on Airbnb and rent it as a corporate suit
How to Save Money for a Car
Down payment – put as much down payment as you can as this lowers the monthly payment
- Refinance – shop around for the cheapest interest rate
- Cash Car – better to save and pay cash for the car than a monthly payment
- Lease Owned – when it comes to money matters, it may be best to own or refinance to own than leasing
How to Save Money for College
This is one of the most challenging aspect of debt management. Especially with the current job market where skill set or demand are rapidly changing. The best way to save money in college is to create habits that support money management skills. Below are some examples:
- Don’t buy new textbooks
- Don’t miss out on a scholarship
- Plan your meals & cut dining out
- Use college amenities e.g. Gym
- Opt for streaming service & cable
- Use student discounts when applicable
- Find a job that helps with tuition reimbursement
- Get a bank account designed for college student especially credit unions
- Sell your used books on Amazon / eBay you make more than your local bookstore
- Plan your courses in advance and get your books from the library or a previous edition instead of buying them
Related articles on How to Improve Your Finances
- Effective Personal Budgets
- 10 Effective Personal Budget Tips
- 10 Investments that Create Wealth
- 8 Tips to Increase Your Credit Score
- 9 Reasons Credit Cards are so Dangerous
- How to Save for Money for Big Events in Life
How to Save Money for a House
This is one of the most pinnacle assets you will own, therefore, it is best to set time and do proper research before you purchase. Below are some best practices to follow:
- Refinance your mortgage for a cheaper interest rate
- Get rid of your PMI once your balance is below a certain balance
- Make an extra payment towards your principal as much as you can
- Borrow from your budget – you may want to cancel some wants and only
- Side Job – best to pick up extra side jobs to meet your goal, no job is too small
- Use 0% credit card to massively pay down your debt. This option is to curate borrowing money with no interest payment. Be mindful of the fine print and when you get charges for interest
- Retirement – you may want to reduce your contributions for some time and fund your down payment account
- Aim to save more than the required payment. Open a new bank account where you just save for your down payment and automate your savings
- Research and itemize all the cost for you to close your house such as inspections/ closing cost etc
- Maximize your savings – you may need to move to a cheaper house in order to save as much as you can
How to Save Money for a Wedding
Saving for a wedding is a big obstacle and can end up costing more than the original budget. The hardest part is paying back thousands of dollars way past the wedding. Try not to bring debt into a marriage. Below are some best ways to save for a wedding
- Sell as much as you can after the wedding
- Don’t invite the whole town – small and intimate
- Get married at the end of the season – prices are cheaper
- Use a venue that is the same as the ceremony and reception
- Don’t get married during the weekend – this creates big savings
- Use in-season flowers or fake ones (they look like the real flowers)
- Get your cake from the grocery store- yes they do wedding cakes
- Get your dress from the past season there are many clearances going on
- Shop during the most discounted times, such as Black Friday or Cyber Monday
- Be Bride Model – approach wedding companies and let them feature you as part of their brand. This allows you to get free stuff. (doing this you have to be savvy and plan way ahead)
How to Save Money for Social Activities
Part of life is enjoying and exploring new places through vacations, but this can clearly this can be costly if you are financing your excursions through credit card. There are numerous ways to enjoy outdoors, vacation or entertainment activities at a lower cost. Below are some examples
- Gifts – create a family spending or limit on gifts
- Newsletter – claim or request rebates or coupons from the company directly
- Rewards Cards – you can use your rewards points towards travel or concerts
- Arts & Culture – there are many museums where they offer low priced or free admissions
- Vacation / Travel – it is best to travel during the off-season as there are fewer people and rates are much lower
- Sign Up for Discount Apps – eg Groupon / LivingSocial / or set Google alerts for free activities in your neighborhoods
How to Save Money Questions
What Is Saving?
Saving is normally referred to as money set aside for long term keeping with a goal in mind such as investing. Usually, saving is defined as amount left over after expenses have been paid, but this can be defined in terms according to your finances.
How Do You Save Your Money?
The best way to save money is to create a budget and then aggressively payoff any outstanding debt. Debt is the most expensive expense and truly drains your savings.
What are Examples of Savings?
There are many variations and types of savings. The best type of saving is one that fits your budget and goals. Below are some types of saving
- basic savings account
- Investment account
- targeted date savings
What is The Purpose of Savings
The main purpose of saving is to have your money grow and set aside for any unexpected expenses or emergencies. Most people have various savings account targeted for various expenses, such as property taxes, vacations or colleges. This method helps in separating funds for each goal.
What are the Types of Saving?
There are different financial instruments that can be used as a savings tool. All are effective in their own specific way and importantly can be used for different goals. Below are some types of savings account:
SAVINGS ACCOUNT – this is the most basic account and does has little interest rates
HIGH YIELD SAVINGS ACCOUNT – usually this requires a set amount to even open the account, but interest rate is higher than a basic account.
MONEY MARKET ACCOUNTS – these tend to have similar functions of a savings account and the interest rates are higher. They have limited amount of times per month you can withdraw.
CERTIFICATE DEPOSIT – this type of account requires you to put money aside and commit it for a specified amount of time such as 6 months to years for a higher amount of interest.
What are the 3 Basic Reasons of Saving Money
There are many reasons to save money but the most 3 basic reasons of saving money includes:
PURCHASING POWER – The more you save the greater your purchasing power, this in clearly exercised when purchasing a home. The higher your down payment, the better your rates will be.
SECURITY – This is one of the most desired reasons of saving, having the ability to provide a security blanket for yourself and family, regardless of any emergencies that may arise such as losing a job, medical bills or other expenses.
WEALTH BUILDING – This is clearly the best way to accumulate wealth. A higher network is calculated by having more assets than expenses. The more savings at your disposal, the more disposable funds you have for investing.
What is The Best Savings Account to Open?
The best savings account is any account that has great interest rate. The best savings account to open is the one that meets your financial goals and has great offers. Each savings account is not created equal, therefore a through investigation is required.
How Much Should You Have in a Saving Account?
There are many different types of savings account and they come with different demands. For your most liquid savings account, it is best to have about six months worth of expenses. Thereafter, your other savings goals can be saved in different accounts such as retirement and or college funds.
What is Better Than Savings Account?
There are many financial instruments, but the ones that are better than a savings accounts, have a better interest rates and your money is still secure. Below are some examples where your money can earn slightly more than a basic savings account
- certificate deposit
- peer to peer lending
- high yields savings account
- or investments that have higher returns
Is it Better to Save than Invest?
It depends upon your goals. For instance, when do you need the money. If you do need the money as soon as possible, therefore, it is much better to invest than save as you earn a higher rate of return.
Success is an intentional act. You have to create your VISION, then plan out your GOALS. You will FAIL more than you will SUCCEED, but be careful not to stumble on stones and conclude that is where your journey ends.
QUOTE OF THE DAY