It's a compelling, if not concerning, fact: over one-third of Americans have $1,000 or less in a savings account, which puts a significant number of people at risk if they were to need cash for an emergency. Life happens, cars need repairs, homes can develop problems and illness can strike. It can be unsafe and unwise to live without a solid savings account, but where do you start? But you can work on building up your savings account right now, starting with these 5 somewhat uncommon, yet simple, ways.
1. Make coffee at home.
Are you a coffee shop regular? If so, you could be spending an average of over $2,100 a year for coffee you could easily be making at home. A one-time splurge on a coffee maker could end up saving you thousands in the long run. That’s money you could be putting in a savings account or college fund for your kids.
2. Start a 52-week money challenge.
The goal of the 52-Week Money Challenge is to save a set amount of money each week. So, on week one you would save $1, week two would be $2, and so on until in week 52 when you save $52 and end with a total of $1,378 saved. However, this challenge can be complicated depending on the flexibility of your income and your ability to shell out almost $250 around the holiday season in December.
There are several variations you can take on this type of challenge. You could start backwards and save $52 on week one, $51 on week two, and then end with just $1 on week 52. You could also save bi-weekly if it’s easier on your paycheck, use pennies and change instead of dollars, or simply dedicate yourself to putting a certain number, not amount, of bills or coins into savings each week.
3. Use cash versus credit.
It’s amazing what happens when you are forced to watch your money disappear. It’s much easier to stick to a budget when you only have a set amount of cash you are able to spend. Do some calculations and figure out how much money you NEED to spend each week. Put away the credit and debit cards and see how much differently you think about money after living on cash for a week or two. This system could help you more accurately budget and understand the money that you spend.
4. Ditch cable.
It depends on the provider and the package you buy, but generally cable TV can cost anywhere from $50 to $150 per month. If you look at the prices of online streaming services, it seems obvious that paying something as low as $8 per month makes sense. Depending on your TV watching habits and the types of shows you want to watch, making the switch from cable to streaming could be easy. However, it’s important to factor in additional costs, such as upgraded internet for faster streaming and modem rentals, plus one-time costs like Internet set-up, fees, or investing in an antenna to get basic channels. Do your research to determine if cutting the cord on your cable plan could be beneficial for you.
5. Improve your credit score.
It might not seem like it, but your credit score could save or cost you tens of thousands of dollars over your lifetime. That little number has a very large effect on things such as loan interest rates, car insurance rates, credit card rates and other financial investments. You can make small changes over time — like underusing your cards, keeping old cards active and more — to slowly improve your number and give yourself some extra money in your pocket.
It’s time to get started planning for your financial future. These tips can help you get started saving for whatever life gives you.