Monday, December 4, 2023
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5 Tips on How to Turn your Paycheck into Savings

As far as difficult things go, saving money is near the top of the list. Not only has the price of living gone up exponentially over the past few decades but impulse shopping is a regular temptation for many. Thanks to online shopping, debit cards you tap, and the borderline extinction of paper money, saving money may be harder than ever.

The truth is that saving is something that everyone needs do, but most of us struggle with. Here are some tips to help get you thinking about how you can turn your paycheck into savings.

Why saving money is so important

Although there’s a trend in North American society to live in the present, here are five important reasons to save for the future:

  1. Emergency funds - Have funds on hand in case of an emergency like essential home repairs, medical expenses, funeral arrangements or an unexpected loss of income. Not only will your savings reduce stress, they’ll protect you financially from going into debt for these must-pay situations.
  2. Retirement – A nest egg is an integral part of retirement. When a steady income stops coming in, you will need to replace that income with funds that have been saved up over the years.
  3. Owning a home – You may want to save up for the down payment on your first home or the home of your dreams. With the way the housing market is going, owing a home is a great investment, one worth saving for.
  4. Enjoying life – Besides the comfort that comes with having savings in your bank account, you can also save for the things that bring you true joy in life. Trips, a vehicle, or other luxury items.
  5. Kid’s future – If you have children or are planning on having them in the future, you can help give them a great starting in life by putting money aside for college and university. You could also use the savings to pay for a wedding or help them buying their first home.

Sure, saving sounds good, but how do you find money to save (especially if you’re living paycheck to paycheck)?

How to Turn Your Paycheck into Savings

  1. Create a budget

A budget is integral to saving money. Start by recording the numbers related to your finances, which helps make them a reality that becomes top-of-mind. Alternatively, use an app to help you figure out where your take home pay goes. Based on this information, many apps will create a budget for you. With a budget you can take control of your finances. Bills obviously come first, and there is nothing wrong with having a little fun money, but anything extra should go into a savings account.

  1. Reduce food costs

We spend more on food now then in any other time in history, and we are wasting food at an alarming rate. This is something that your household can change by following a few simple rules:

  • Always shop with a list and stick to it
  • Don’t shop when you’re hungry
  • Look for deals
  • Use coupons
  • Buy reduced priced veggies and meat to cook that night.
  • Limit restaurant visits.
  1. Make debt payments less expensive

Sadly, debt is a part of most people’s lives, but we can help ourselves in how expensive our payments are. Look at refinancing your mortgage or student loans. Other options include transferring high-interest credit card debt to a new lower-interest card and getting rid of extra credit cards. These are just a few ways to cut down on your debt repayments.

  1. Look for ways to bring in more money

If you want more savings, consider bringing in more money. You may want to get a part-time job or find a side job (fixing things, lawn care or snow removal as an example). If you have a hobby that you enjoy, try to make some extra cash from it. Woodworking, steel work or photography are all ways that you can add to your savings, while having a little fun. You may want to also check out local job sites for potential work.

  1. Set up direct deposit into your savings

The more chances you have for money to go into your savings without seeing it, the better. You can’t miss something that you don’t see. Set up a direct deposit with your employer or through your bank for a portion of your paycheck to go right into your savings. Even $50 a week will add up quickly and if you’ve budgeted appropriate it won’t cause you to be short in other areas.

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