Healthy & Wealthy In 2021
This week, I want to build upon the momentum of the recent presidential inauguration and give some tips on how to manage new presidents. No, not President Biden, but the presidents in your wallet – Washington, Lincoln, Hamilton, Jackson, and Grant. That’s right! We are talking about money.
I hope by now you have had the opportunity to write down your goals for the year, create an action plan, and modify your schedule to suit your new goal-driven lifestyle. For those who set financial goals and those interested in being proactive about your relationship with new presidents coming your way this year, keep reading for 5 tips to increase your savings.
Pay Yourself First
You have heard it before, but I will say it again. The same way you must put yourself first when it comes to your physical and mental health, to obtain true financial wellness, YOU MUST PAY YOURSELF FIRST. 2021 is going to be a year of unprecedented growth. But, “what you do not water will not grow” and this includes your bank account.
Now that we know what won’t grow your money tree, let’s talk about what will.
Tips for Increasing Your Savings this Year
- Budget – Your budget is more than a list of bills and expenses. It is the blueprint for all your spending and an accountability tool that helps you manage your money wisely. There are many different budgeting strategies to choose from. Some people save a percentage of every check while others set a dollar amount. The amount you set aside can be as low or as high as you want. The important thing is getting in the habit of planning and paying for the future.
Do consider your recurring expenses, debt, and spending habits and determine a feasible savings goal. Don’t forget to calculate your savings and a treat for yourself every month.
- Separate Your Money – It is crucial to separate your spending money from your savings especially if you are new to the practice. Use an existing account or open a new account without a debit card to minimize temptation. You can even consult with your employer about how to get a portion of your earnings deposited directly into your savings account.
Do adjust your budget if you find yourself using your savings too often. Don’t treat your savings like a second checking account.
3. Invest in Stocks – In 2021, the year of you, you do not have to work for every dollar you earn. Let your money work for you instead. Investing in stocks is only one form of passive income but a valuable one indeed. Investing allows you to purchase a small percentage of stock in a company in exchange for a portion of that company’s profit. When done right, it can be a great low-cost way to generate extra cash and multiply your savings.
Do include investments in your budget and apply your savings plan to any profits you make. Do not start before you do your research.
You can start here: How to Invest in Stocks in Six Steps.
- Cut Unnecessary Costs – More than once I have reviewed my monthly bank statement and thought to myself, “When did I buy that?”. Even more perplexing, “When did I subscribe to that?”. As you create your budget, take a close look at your spending, and identify a few things you no longer need or use. Cancel those subscriptions you forgot to end after the trial. Try some generic brands to reduce your grocery bill. Save gas by walking to nearby stores. Buy household items in bulk. You will notice a difference almost immediately in how much is left over to save.
Do be ready to make some sacrifices. Do not replace cut costs with another frivolous expense. If you don’t need it, save it.
- Be Prepared for Unexpected Expenses – Life happens. Tires go flat. Washers break. Pets get sick. If an unexpected expense arises, make a temporary adjustment to your savings plan.
Do save what you can even if it is only $5. Regroup and return to your regular savings plan when you can. Do not be discouraged, and certainly do not quit.
