Tips for Financial Preparedness: Saving

As the New Year approaches, many of us list “finances” as one of our resolutions. According to Bankrate.com, 76% of Americans are living paycheck-to-paycheck, with little to no emergency savings. Fewer than 25% of Americans have enough money in their savings account to cover at least six months of expenses and 27% had no savings at all. How do we change this? We decided to ask an expert.

For more than a decade, Tana Gildea has served as a CERTIFIED FINANCIAL PLANNER™ and a Certified College Funding Specialist. She is also the author of The Graduate’s Guide to Money and an instructor for our Certified Financial Planner™ Program. Here are some of her thoughts on the best ways to save money:

Top 5 Tips on Saving

1. Automate your savings so that the money automatically goes from your checking to your savings/investment account every week. Even if you only start with $5, save something – it adds up!
2. Consciously grasp the fact that five bucks matters — it matters whether you spend it, save it, or use it to pay down debt. Don’t let your money drip through your fingers five bucks at a time (or even one buck at a time).
3. Game your way to more savings:
   • Challenge your friend group to come up with free activities that you can all do together. Take the money you likely would have spent on dinner out, drinks at the club, or a movie, and move it to savings. There are several apps that can help you track this.
   • Challenge yourself to find three things this week that you impulsively want (a mid-afternoon snack, a trip to the coffee place, a shiny object to throw in your cart) and pass on them – you got it, move the money to savings right then.
   • Challenge your spouse/significant other to see who can spend the least amount of money this week – winner gets a massage from the other.
4. Track your spending for a week or two and categorize what you buy into “must have,” “stuff,” “entertainment,” “big dreams.” Look at stuff and entertainment versus big dreams. Truly, which feels the best to spend money on? Can you cut 10% to 20% out of those categories next week to put money toward big dreams? And, is “financial freedom” and “debt freedom” on your big dream list?
5. Visualize your dollar bills as soldiers to do your bidding. Are they protecting and strengthening your fortress or are they being sent to guard another? (This is a thought from an author I heard speak years ago – to him goes the credit, whoever he may be!)