With the holiday shopping season just starting and prices of many consumer goods continuing to rise,\u00a0saving money\u00a0can seem impossible. But those financial pressures also make doing so even more important.<\/p>\n
\u201cSaving is your margin,\u201d says Eric Maldonado, a certified financial planner and owner of Aquila Wealth Advisors. \u201cWhen things happen \u2014 your car breaks down or there\u2019s a layoff, or smaller stuff like gifts for the holidays \u2014 you have something to fall back on.\u201d Maldonado notes that saving can also allow you to have money for fun things.<\/p>\n
The personal savings rate for Americans has been dropping in the last few months, and as of July was 3.5%, according to the U.S. Bureau of Economic Analysis.<\/p>\n
Maldonado recommends aiming for a savings rate closer to 20% of your take-home income. \u201cYou can live off of 80% and put 20% toward deferred gratification,\u201d he suggests.<\/p>\n
That guidance matches the popular\u00a050\/30\/20 budget, which suggests putting 50% of your take-home income toward needs, 30% toward wants, and 20% toward savings and any debt payments. \u201cIf you\u2019re just starting out, then it can be too daunting, but you can work toward it,\u201d Maldonado adds.<\/p>\n
Plus<\/strong>: Moonlighting as a car valet, tending bar and moving back home: Borrowers get ready for the return of student-loan payments<\/p>\n If you\u2019re looking for ways to power up your savings, consider these strategies:<\/p>\n \u201cOne of the biggest mistakes people make is buying things you don\u2019t need,\u201d says Vivian Tu, author of the forthcoming book \u201cRich AF: The Winning Money Mindset That Will Change Your Life\u201d and a TikTok influencer who posts as @YourRichBFF. To counter that tendency, she recommends \u201ctaking a beat\u201d before making any purchase. \u201cReally ask yourself, \u2018Why do I want that thing? What makes it special?\u2019\u201d she suggests.<\/p>\n Tu says asking herself that question helped her scale back on material purchases so she had more money for experiences, like vacations and brunches with friends.<\/p>\n Don\u2019t miss:<\/strong> Prozac for shopaholics? Compulsive shopping is a real disorder\u2014how to recognize if you have a serious problem.<\/p>\n For big expenses that are on the horizon, Cary Carbonaro, a CFP and senior vice president at financial advisory firm ACM Wealth, recommends setting aside a small amount of money each month so the final cost doesn\u2019t overwhelm your budget.<\/p>\n \u201cIf you know you\u2019re going to spend $1,200 at Christmas, then put aside $100 a month for the whole year,\u201d Carbonaro suggests. \u201cEverybody overspends in December unless you budgeted for it.\u201d<\/p>\n When Ryan Greiser, a CFP and founder of the financial firm Opulus, and his wife noticed their credit card bill going up with inflation, they brainstormed ways to cut back. One of their most successful ideas was relying on online grocery ordering with curbside pickup.<\/p>\n \u201cWe noticed that if we did curbside pickup, our bill was $50 to $100 less than if we went into the store because we only bought the things on our list. It reduced impulse buys and allowed us to easily compare prices and coupons that popped up on the screen,\u201d Greiser says. Given their weekly shopping needs for a family with three young children, that shift allowed them to save $200 to $400 a month.<\/p>\n Greiser and his family also started saving $10 to $30 a month by rotating their streaming subscriptions based on what shows they were currently watching. \u201cWe keep one or two active subscriptions and cancel the rest or pause it when a show wraps up so we can rotate to the next one,\u201d he says, adding that he sets a reminder on his calendar so he doesn\u2019t forget to cancel.<\/p>\n Similarly, he pauses his fitness subscriptions when the weather is good enough to exercise outside. \u201cThey are month to month, so easy to pause and restart,\u201d he says.<\/p>\n Learn more: <\/strong>How to maximize your streaming dollar in October 2023, and why Netflix is all you really need<\/p>\n Speaking up for yourself is another saving strategy. \u201cYou have power as a consumer,\u201d Tu says.<\/p>\n That means you can ask your bank to waive late fees or overcharge fees, or ask for a discount on shoes that have a scuff on them. \u201cBe polite, be kind, but you can be entitled and understand that your business has value,\u201d she adds. The answer might be \u201cno,\u201d but there\u2019s no reason not to ask, and it might just save you some money.<\/p>\n Also see:<\/strong> Do you know your credit card\u2019s interest rate? Here\u2019s how much a few percentage points can cost you over time.<\/p>\n Find discounts on the bills you don\u2019t look at very often, too. Instead of letting your home and auto insurance auto-renew each month, consider taking time to\u00a0shop around\u00a0through an online comparison tool. When Greiser did that, he ended up saving a total of $1,000 on his bundled auto and home insurance plan.<\/p>\n Popular\u00a0cash-back apps\u00a0like Rakuten, Ibotta and RetailMeNot allow you to earn cash back for online shopping after you set up an account. \u201cI highly recommend using cash-back apps,\u201d Tu says. \u201cI know it seems like kind of a pain to sign up, but you can save hundreds of dollars a year because it lets you get cash back on purchases you were already making.\u201d<\/p>\nPause before buying<\/strong><\/h2>\n
Spread out the impact of big expenses<\/strong><\/h2>\n
Try curbside pickup<\/strong><\/h2>\n
Rotate subscriptions<\/strong><\/h2>\n
Ask for discounts<\/strong><\/h2>\n
Shop around for insurance<\/strong><\/h2>\n
Sign up for cash-back apps<\/strong><\/h2>\n