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If you’re trying to figure out how much to save each month, how much you should be saving is dependent on how much money you make. That’s not the whole story though. It can also depend on how much debt you have, how much you want to spend each month and your savings deadline.

4 Things to Take Into Account When Saving

When you’re starting to implement saving into your life, you’ll want to consider these four things.

What Are My Goals?

Knowing your goals is important because it’ll help you determine how much to save each month. You may want to travel the world or buy your dream home. Saving for a new car is different than saving for retirement. Once you know what you’re saving for, how much can be saved and how fast you need to save will become more clear. These goals may be short term, long term, or both, but it’s important to identify what benchmarks you need along with how much more you’ll need to save.

What Debts Do I Have?

Knowing your debts will allow you to take into account any financial limitations to saving. Dealing with your debts is an important step in saving because it allows you to avoid paying unnecessary fees while also freeing up funds that previously went to paying off a portion of your debts. If you’re struggling to save or feel like saving is out of reach due to debt, we recommend looking into debt settlement, which could help you resolve debts quicker and for less than you owe. Learn more here: How It Works.

How Can I Plan to Save?

The best way to plan to save is by starting small. It’s one thing to say how much money you should save each month, but unless you are able to actually fit that amount into your budget for the month, it won’t do much good. Saving requires sacrifice—whether this is cutting out luxuries or just living with less—so you have to be prepared to stick with this change in lifestyle if you want results.

What Should I Do With My Savings?

There are benefits to putting your savings into something other than a basic bank account, investing your money can increase your savings over time. In general, when it comes to savings, it’s good to have a mix of investments and cash on hand savings. 

How to Start Saving Money

Now that you’re committed to saving money, you may find yourself lost in figuring out where you should start. While there are many ways you can start saving, it ultimately comes down to simple things that make a big impact on your financial status.

Reduce Your Expenses

There are many ways you can reduce your expenses and save money. You could cut down utility costs by unplugging appliances when they aren’t in use, such as coffee makers and cell phone chargers, or turning the lights off when you leave a room.  Perhaps you could downgrade your cable package to a lower channel selection or cancel unnecessary subscriptions. There are ways you can save big by simply being more conscious of how much money is going out every month.

Increase Your Income

Increasing your income is another way to help you save money. Some ideas include asking for a raise, taking on a second job, or developing a new skill and offering your services as a freelancer. Any way you slice it, the more income sources you have coming in each month, the easier it will be to save money.

Get Rid of Debt

Debt can be an unnecessary burden that keeps you from realizing the full benefits of your income level. If you’re dealing with debt, it can be difficult to save money. However, resolving your debt can make a big impact on how much you’re able to save. If you need help creating a plan to become debt-free, or you feel like you owe too much to pay back, we recommend considering a debt settlement company. These companies could help you resolve your debt for less than you owe, allowing you to keep more money in your pocket each month. Get a free consultation from one of CreditAssociates’ certified debt consultants today! 

Automate Savings

Automating your savings can be a great way to build up your nest egg. If you automate how much money is taken out of your account, you won’t have to think about it and you will keep on track with saving. You can set savings goals that are automated or you can set up accounts that automatically transfer funds into them each month based on how much you should put away.

It’s never too late to start saving money, but the sooner you begin, the better off you’ll be down the road. Even if it’s just a little at first, starting right now will give your savings time to grow over time without any additional effort.

How Much Do People Save?

A study by the Bureau of Economic Analysis found that people in the USA have a personal saving rate of 9.6% as of July 2021. What this means is that in general people have 9.6% of their income left after paying taxes and spending money. That extra saved money goes to savings accounts, investment accounts, college funds for their children, and more.

How CreditAssociates Can Help

If you’re wanting to save more money each month, then a great place to start is by getting rid of your debt. If you’re currently overwhelmed by the amount of debt you have and aren’t sure where to start, let us help. Our certified debt consultants can provide you with a free consultation to help you find out how you could become debt-free for less than you owe. Reach out today!

Common Questions About Saving:

Why is saving important?

Saving is important because it helps you to not only create a financial safety net, but also provides peace of mind. It allows you to prepare for the future and ensure that you’re financially sound.

Is 40% of my income a good number to save?

40% is a great amount to save each month, if you are able to. Saving this amount will likely allow you to have an aggressive savings goal or allow you to reach your goals in a shorter period of time. However, this can feel out of reach if your finances are feeling stretched or you’re trying to pay off debt. In this case, we recommend starting with saving whatever you can! We also recommend looking into debt relief to help reduce your debt and achieve more affordable monthly payments.

What percentage of people in the USA live paycheck to paycheck?

A study performed by Highland Solutions found that 63% of respondents said they were living paycheck to paycheck. If you’re struggling to save because you’re trying to pay off debt, there’s help available. CreditAssociates specializes in negotiating with creditors to help clients reduce what they’re required to pay back, helping them become debt-free for less. Get a free consultation today.

What’s a small way I can start to save?

One simple, easy way to start saving money is to save spare change. Spare change can add up over time and could become quite a bit of money. We recommend finding a jar that you can put any loose change into at the end of the day. Another easy way to start with saving is to set up an automatic transfer into your savings account each week or each month. This will ensure that you’re putting away money without having to think about it!