By Alex Salder Thomas, clarkhoward.com
The more money you save now, the richer you’ll be later. So how do you actually make that happen?
It can be a lot easier than you may think.
Changing your spending and saving routine doesn’t have to be a life-altering process. By making a few small changes and establishing good habits, you can improve your financial life without even changing your lifestyle.
To help you get started, we’ve rounded up a list of things you can do over the next week that will drastically improve your finances both now and down the road.
9 things you can do this week to improve your financial life
1. Make an extra payment toward a debt
The average U.S. household is carrying more than $15,000 in credit card debt, according to a study by NerdWallet. And as that debt rolls over each month, the total amount owed continues to increase — sometimes by quite a lot each month — depending on the credit card’s interest rate.
Think about your situation: do you have any credit card debt or student loans hanging over your head? Those debt obligations can be big obstacles keeping you from reaching your financial goals. So the quicker you get it paid off, the quicker you will be able to truly start building wealth.
One thing you can do today is make just one extra payment toward a debt. While you may not be able to pay off the entire balance today, every little bit helps. Skip a splurge this week and use that money to pay extra toward your credit card bill or student loan debt. Put the extra money toward whichever debt has the highest interest rate — as that’s the debt that will end up costing you more money over time (the longer it sits there accruing interest, the more you’ll owe).
Paying an extra $100 toward debt, instead of wasting it on something you don’t need, will be more beneficial to your long-term financial goals by allowing you to become debt free sooner in life. Plus, the more you start to pay down debt, the quicker you’ll see the light at the end of the tunnel of getting it paid off.
2. Transfer a high-interest debt
If you have a big credit card bill that’s slamming you with high interest fees every month, transferring the balance could save you hundreds of dollars. By allowing you to transfer the debt to a credit card with 0% APR (annual percentage rate) for a certain number of months, these types of offers can help you pay off your debt in a timely manner — without having to pay interest.
So if you have a credit card with a high interest rate, check out this list of great balance transfer options.
Once you transfer the debt, your payments will go a lot further without the high interest — which will cost you less money in the long run and also allow you to get it paid off quicker.
3. Cancel a subscription
Think about all of the monthly expenses you have — which ones do you have to pay (rent, utilities, debt) and which ones can you cut? Many people don’t even realize all of the little things they’re paying for each month — with many of payments set on auto-pilot, slowly deducting cash from your accounts. But without taking a step back and looking at the total cost of all those little expenses, it’s difficult to know how much they’re really costing you.
If you want to get your money in order — both for the short term and the long term — take a look at all of your monthly subscriptions and figure out which ones you don’t really need. Cut at least one. Then next month, cut another one. After a few months, you’ll start to see the difference in your accounts, allowing you to save more and develop better budgeting habits over time.
Here are a few examples of subscriptions you may be able to live without:
- Gym membership: If you go to the gym every day, you may want to keep your membership. Go to the manager and ask about special offers to decrease what you’re paying. You can also shop around for better prices at other gyms — then take a better price offer to your current gym and ask for a decrease in your membership fee. Also check out these 8 ways to save on a gym membership.
- Cable: Here’s a list of several alternatives.
- Magazine subscription
- Other: Are there any monthly/annual subscriptions (like Netlix or Amazon Prime) that you can cut and share with someone in your family?
4. Lower a monthly bill
A lot of people don’t realize they can lower their existing monthly bills just by doing a little negotiating.
5. Increase your 401(k) contributions
Log on to your 401(k) or other retirement account online and increase the amount you’re contributing each year. A boost of just 1% is probably small enough that you won’t even notice the money gone when you get your next paycheck. And even just an extra 1% can add up to a lot of extra savings over time!
If you can’t do it online, make a note to call your plan provider tomorrow!
6. Make your savings automatic
The best way to start saving more money is to make it automatic. By giving every dollar a purpose, you can avoid reaching the end of the month and having no clue where all your money went — including the money you intended to save.
Figure out how much money you can realistically save each month, after covering all your bills and other expenses, and then set up your direct deposit to have that amount sent directly to savings. That way you won’t be tempted to spend it, and if you absolutely need the money, you can access it pretty easily.
7. Cook dinner at home
According to a recent survey, among households with annual incomes of $75,000 or more, one-third live paycheck to paycheck, and 44% said lifestyle purchases, such as dining out and entertainment, were big hindrances to saving. Among millennials bringing home $75,000 or more, 71% confessed these expenses were stealing their savings.
Get into the habit of cooking at home more. The more you do it, the more you’ll save. Plus, a recent study found that eating at home will help you lose weight, too.
8. Make a doctor’s appointment
America spends more than any other country on health care — with the average 65-year-old couple needing nearly $250,000 to cover medical costs in retirement.
As we continue to age, our health care costs continue to go up. And whether you plan for it or not, the added expenses can cause people a lot of problems in retirement. The good news is that some preventative care can help reduce the impact in the future. Investing in your health now is a great way to invest in your wealth for the future.
9. Don’t pay full price for anything for a week
It’s really incredible how so many people neglect the various ways to save on all types of purchases these days. You don’t have to carry a giant coupon binder with you to the grocery or rummage through a thrift store to save money.
All it takes is a little comparison shopping or just simply knowing what to buy where — in order to save on things you buy all the time. And once you figure out how much you could be saving, it’ll change your spending routine — and save you a lot of money over time.
Here are some ways to save: