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Apache is functioning normally

December 8, 2023 by Brett Tams

Inside: Balancing a shoestring budget is possible and provides great rewards. With savings and budget strategies, you will find genius tips to manage your finances smartly!

With the rise of economic inflation, a growing number of people are finding the need for shoestring budgets to effectively navigate through their expenses.

Whether it’s planning for a low-cost holiday, initiating a frugal home makeover, or launching a start-up business with minimalist funds, the concept of a shoestring budget comes into play.

Moreover, it’s not only limited to low-income families but also extends to larger households and entrepreneurs that need to strategically lessen costs to achieve their goals. This is how many people reach financial independence sooner.

Then, let’s talk about a shoestring budget – an effective tool used to stretch finite resources, manage money wisely, and achieve financial goals, all while minimizing expenses.

If you’re familiar with the feeling of every dollar in your wallet counting, then this blog post is for you.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

What is a Shoestring Budget?

A ‘shoestring budget’ means to accomplish a task or a project within a very limited or bare minimum budget. The shoestring budget work strategy involves curbing discretionary spending dramatically to take care of high-priority expenses.

Understood across various contexts like travel, events, and lifestyle, the term implies an approach of resourcefulness and discovery of low-cost alternatives to achieve desired results.

Not exclusive to households with low incomes, working with a shoestring budget expresses the art of making what’s deemed impossible possible, navigating time constraints, and maximizing minimal available funds.

Shoestring Budget Idiom Definition

According to Merriam-Webster, the official definition of a shoestring budget is: ¹

“involving a relatively small amount of money for planned spending.”

‘Shoestring Budget’ Origin

The phrase ‘shoestring budget’ has an intriguing origin story that dates back to the 1800s in the United States. Fact-checks reveal that this term is indeed a reference to the precarious nature of a thin and weak shoestring, metaphorically implying a scarce and strained budget.²

Several theories have been proposed regarding its original use.

One theory suggests that the term ‘shoestring gambler,’ meaning someone gambling with a limited budget, might be the precursor to the idiom.
Another theory, based on British history, suggests that prisoners would lower a shoestring out of their cell to collect small donations from passersby, symbolizing the idea of managing with few resources.

Despite the debates around the phrase’s exact origins, it is undisputed that it signifies a tight budget situation.

How to live on a shoestring budget?

Living on a shoestring budget can be challenging but doable with a bit of dedication and planning.

Start by reviewing your regular expenses per month.
Cut down on unnecessary expenses as much as possible.
Monitor your small, daily expenses as they can add up significantly over time.
Refinance any existing debt to reduce interest payments.
Renegotiate contracts with utility providers, subscription services (consider uninstalling unused ones), or insurance for better rates.
Shop at thrift stores or choosing used items over brand new can also help you save.

The key to surviving a shoestring budget is self-control and determination to avoid impulsive spending.

Your goal is to prioritize essential needs over wants – a no spend challenge will help you with this. Remember, regular tracking and analysis of your personal site usage can provide valuable insights to manage your budget better.

How to travel on a shoestring budget?

Embarking on an adventure while on a shoestring budget requires creativity and pre-planning.

Be flexible with your travel dates, destinations, and mode of transport to take advantage of the best deals available.
Consider options such as budget airlines, off-peak travel times, and less touristy locations.
Staying in budget accommodations, or even trying out housesitting, can significantly cut down your lodging costs.
Eating at local fresh markets rather than restaurants will not only save you money but also provide a more authentic experience.
Plan your daily activities; consider free local events, parks, and attractions.
Always carry a water bottle to avoid buying expensive drinks.

With careful planning, traveling on a shoestring budget can make your journey all the more rewarding and memorable.

How to Save Money on a shoestring budget?

Saving money while on a shoestring budget might appear challenging, but it’s not impossible. Begin by monitoring your expenditures and identifying areas where you can potentially save money. Also, consider substituting costly activities with more affordable or free ones.

Every small action counts when you’re on a shoestring budget, and these savings accumulate over time. Remember, consistent small savings can make a significant difference in the long run.

Starting a business on a shoestring budget

Starting a business on a shoestring budget requires careful financial planning and innovative thinking. Indeed, it may sound challenging, but numerous shoestring startups have surged to success by optimizing their business budgets. It is all about crafting a solid business plan that clearly delineates your budget and the efficient utilization of each dollar.

Maintain focus on essential expenses only. These expenses might include mandatory licenses, essential software for business operations, or even crucial industry-specific tools. Leverage your personal and professional networks for free advice and resources.

Also, make the most of free or low-cost online marketing strategies as these can be vital to shoestring business budgets. You can use effective strategies, like using different social media platforms for marketing or creating a blog, to broaden the reach of your business.

Remember, having the capital to start is important but it’s secondary to a truly novel idea, intense hard work, and a strategic approach. So, let your creativity thrive and work passionately towards growing your business.

Shoestring Budget Examples

Shoestring Vacation
Wedding or Honeymoon
Home Improvement
Business on a Shoestring Startups
Savings Goals
Financing your Next Car

A shoestring budget is not always related to bigger projects. It can also refer to the scenario where the money required for daily expenses, buying an item, or completing a project isn’t enough. Here, the person has to be creative and find ways to stretch the money to make ends meet.

Practical Tips for Surviving on a Shoestring Budget

In this section, we will present practical advice for managing a shoestring budget, derived from case studies of my readers and my own personal experience who have thrived despite financial limitations.

Whether you are budgeting on a low income or looking to reach FI number faster, this guide has you covered.

1. Starting with a Budget: Your First Step

Before you embark on your journey of living on a shoestring budget, the first step is to define a realistic budget.

Understand your total earnings and list all your monthly expenses.
Identify which expenses are necessary (rent, utilities, groceries) and which are discretionary (eating out, entertainment).
Now create a spending plan such that it covers all necessities, allocates some amount towards savings, and leaves a little for leisure.

A well-defined budget will be your roadmap to financial management success.

Remember, the goal is to live within your means but also to ensure you aren’t depriving yourself.

2. Make Saving Automatic

A proven way to save money on a shoestring budget is to make saving automatic.

In such a method, you can set up an automatic transfer when you get paid. Another idea is to use Acorns, which rounds up purchases made with your debit card to the nearest dollar and deposits the change daily into your savings account.

Essentially, you’re saving without even noticing it! These little amounts add up over a period and can really bolster your savings.

Acorns

Invest spare change, invest while you bank, earn bonus investments, grow your knowledge and more.

Every purchase you make means an opportunity to invest your spare change! So coffee for $3.25 becomes a $0.75 investment in your future.

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3. Cut Back on Expenses

One of the most effective ways to operate within a shoestring budget is by reducing expenses. These can be small lifestyle changes, like cutting back on takeaways and preparing meals at home, walking or cycling instead of driving short distances or canceling unused subscriptions.

Specifically, you are looking to cut back your flexible expenses the most.

4. Look for Ways to Make Extra Money

Alongside cutting back on expenses, we continually stress the importance of finding ways to supplement your income. This could be from a side hustle, passive income, part-time job, or even a pay raise.

This additional income can help ease pressure on your shoestring budget. Also, it might provide an opportunity to explore new interests or passions. By diversifying your income streams, you make your financial situation more secure and flexible in unexpected circumstances.

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5. Utilize Free Resources

When it comes to saving money on a shoestring budget, the key is to utilize free resources and focus on essentials before spending money.

Thankfully, there are many vital ways to do this:

Find free things to do without spending money.
Use your local Buy Nothing group to find items before spending your hard-earned cash.
Learn and enhance your skills through free or low-cost online platforms like Udemy, Coursera, and YouTube.

Leveraging such resources can have a significant impact on your budget, leading to substantial savings for other meaningful expenses.

6. Look for Deals and Coupons

Another wise strategy when operating on a shoestring budget is seeking out deals and using coupons whenever possible. This game-changing approach can be applied to your grocery budget, dining, clothing purchases, and even travel.

Search for coupons in newspapers, magazines, or on coupon websites. Perhaps, subscribe to newsletters from your favorite retailers, a move that will provide straightforward access to information about sales and discount codes. Be mindful while shopping online or in stores, and always remember to rein in impulses, checking for any available discounts before purchasing.

Moreover, take advantage of holiday sales or Amazon Prime Day for larger purchases. Taking a little extra time to hunt for the best deals can significantly cut down your expenses and help you stick to your shoestring budget.

7. Utilize Household Resources

Leveraging what you already have in your household is another fantastic way to save money.

For instance, before running to the grocery store, take stock of what’s in your pantry and design meals around these items.
Also, consider repurposing and upcycling household items. An old ladder can turn into a chic bookshelf; jars can be used for storage.
Optimizing utility usage by switching off lights when not in use and limiting water usage can also reduce bills.

Start treating everything in your house as a resource with a specific purpose and value, including leftover food, old clothes, and used furniture. Every household item utilized efficiently can add up to visible savings over time.

8. Get Rid of Unnecessary Expenses

Perhaps the most crucial aspect of managing a shoestring budget is identifying and eliminating unnecessary expenses. These could include subscriptions to magazines or online services that you hardly use, dining out frequently, or buying expensive coffee daily.

Analyze where your money is going every month. You’d be surprised how the smallest changes can have a big impact on your budget. Eliminating even a few unnecessary monthly expenses can add up to substantial yearly savings.

Remember, the key is not to deprive yourself of everything but to find that balance between living comfortably and within your means.

9. Reduce Your Monthly Rent or Mortgage Payment

Want to slash a significant expense of your shoestring budget by considering ways to reduce your rent or mortgage payments? Could you move to a more affordable area or a smaller property?

For homeowners, look at refinancing your mortgage or negotiate better terms, resulting in lower monthly payments. Always remember to check if any fees would apply before proceeding with refinancing.
If relocation isn’t an option, consider renting out a spare room in your home or offering it on a vacation rental site.
If you are a renter, look at becoming a permanent housesitter.

Lowering these substantial expenses can make a huge difference in your budget, allowing you to allocate funds to other pressing areas, save, or even invest in building wealth.

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10. Be Creative When Paying Bills

When managing a shoestring budget, it can be helpful to get creative with the way you pay your bills. Sometimes, splitting payments between paychecks or paying on certain days can make managing your budget easier.

You could also consider bill negotiation services or check if you qualify for reduced rates based on your income. If meeting all payments becomes too strenuous, communicate with your service providers about it. They may have hardship programs or payment plans to assist during tough financial periods.

Remember, the key is to avoid late fees or penalties that could further strain your budget.

11. Leverage Technology to Save Time and Money

Make the most of technology to manage your shoestring budget. There are numerous mobile apps and online resources to help you track your expenditures, save money, pay bills, and even invest.

Budgeting apps can help you keep track of your income and expenditure, warn you when you’re nearing your limit, and provide valuable insight into your spending habits. Digital wallets can help you make secure transactions without the fear of losing cash.

Moreover, there are apps and websites to compare prices of different products, get the best deal alerts, apply instant coupons, or even earn cashback like Rakuten.

Quicken

Personal finance and money management software allows you to manage spending, create monthly budgets, track investments, retirement and more.

I have used this platform for over 20 years now.

Pros:

Birds-eye view of your complete financial picture.
Conveniently download your spending activities, and automatically categorize them (Quicken connects to over 14,000 financial institutions).
Track investments with it’s features like portfolio analytics, retirement goals, and market comparison.

Cons:

Little complex to use at first, the learning curve is moderate.
Yearly subscription-based model to use the platform.

Save 40% on New Memberships

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12. Participate in a Mini Savings Challenge

As a fun and effective way to boost your savings, consider embarking on a mini savings challenge! These challenges break the intimidating concept of saving into manageable, small steps. They can vary based on duration and the amount you’re aiming to save.

For example, in a 52-week challenge, you save $1 in the first week, $2 in the second, and so on, until you’re saving $52 in the 52nd week. By the end of the year, you’ll have saved $1,378!

Not only does it make saving fun, but it also allows you to develop a consistent saving habit, crucial when budgeting on a shoestring.

Frequently Asked Questions (FAQ)

If you’re fortunate enough to have a budget that’s more than a shoestring, the principles discussed still apply. Having more resources doesn’t mean you should ignore opportunities to save and invest wisely.

So, whether your budget is minimal or ample, consider adopting these healthy financial habits to achieve your financial goals. Make sure to sock away any extra money into a savings or investment account so you aren’t tempted to spend it.

Starting to invest on a small budget involves several key strategies. You must pay yourself first each and every time you are paid.

Set up an auto savings plan through a high interest savings account to make sure you start earning interest.
Contribute enough to your 401(k) to take full advantage of your employer’s match, if available, and consider mutual funds with an initial investment as low as $500.
Pick one solid company wherein you believe data and financials are stable enough to invest in, and buy 1 share.

If you receive a work or tax refund bonus, allocate it towards your investments instead of immediate spending.

Key Takeaways: Managing Money Well on a Tight Budget

Managing finances on a shoestring budget can be a daunting task, but with the right strategies in place, it can become a way to achieve financial health.

This is something I did when I was a stay-at-home mom looking for ways to make money.

In the grand scheme of things, managing a shoestring budget is less about the money and more about your mindset. Yes, limited resources can present challenges, but your attitude and creativity can make a difference.

Embracing frugality, taking control of your financial choices, and building resourceful strategies can turn your constraints into opportunities.

Money comes and goes, but the ability to manage it effectively is a life skill that will always be beneficial. The real wealth lies in your ability to live within your means and make the most of what you have – turning your shoestring budget into a stepping stone towards financial independence and stability.

Remember, every journey starts small.

Day by day, these tips can help you improve your financial stability and achieve your goals, regardless of your budget size.

Source

Merriam-Webster. “on a small/tight/shoestring budget.” https://www.merriam-webster.com/dictionary/on%20a%20small%2Ftight%2Fshoestring%20budget. Accessed December 5, 2023.
Grammarist. “Shoestring Budget – A Creative Expression for Limited Money.” https://grammarist.com/idiom/on-a-shoestring-and-shoestring-budget/. Accessed December 5, 2023.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

November 29, 2023 by Brett Tams

Inside: Tight on time or money? One of these mini savings challenge printables is perfect for you. With these free printables, you’ll be able to save more money in no time.

The concept of a mini savings challenge is all about making money-saving a fun and engaging process. It breaks down your broader financial goals into manageable, short-term targets that cumulatively will help you reach your long-term objectives.

Around here at Money Bliss, we are known for having the best money saving challenges. While they are super popular on Pinterest and Google, what matters the most to us is that people are actually using them and their lives are changing.

So, if that is what you are looking for, then you are in the right place.

We know that the personal savings rate is dipping into the lowest range since 2007-2008 financial crisis around 3.4%.¹That is alarming because many people are one step away from not being financially stable.

Let’s dig into those mini saving challenges to make an impact in your financial life.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

Why is a Savings Challenge Beneficial?

A savings challenge, while enjoyable, serves a more significant purpose. It instills a sense of financial discipline and allows you to visualize tangible results.

By making saving a fun and rewarding game, you’re more likely to stay committed and motivated.

This is why my money saving challenges are so helpful for thousands of my readers.

How this Mini Challenge Works?

Mini savings challenges work on the principle of small, regular savings resulting in significant sums over time.

By following a set rule – such as saving a particular amount every week, or matching a specific spending habit with a savings deposit – these challenges make it easy and fun to grow your savings without feeling overwhelmed.

Popular Mini Savings Challenge to Save Money

I love that I am known as an expert in helping people save money. The reason is simple – I love a good challenge.

If you have the right mindset, then you can save money on your income.

1. $300 Mini Saving Challenge

Many of us dream about having a comfortable savings account, but it’s often easier said than done. However, with the $300 Mini Saving Challenge, you can start building that financial safety net one step at a time. This challenge aims to help you stow away $300 and note slight improvements in your spending habits.

The $300 Mini Saving Challenge works by asking you to save a small amount each day. The goal is to gradually increase the daily savings, making it less burdensome and more achievable to hit your target of $300. This challenge is perfect for beginners who are apprehensive about taking on substantial financial commitments all at once but still want to cultivate good money-saving habits.

Expert Tip: Utilize a savings tracker, whether it’s a traditional paper-and-pencil method or a digital app, to keep track of your progress.

Raisin

Simply select one of the high-yield savings products offered by their network of federally insured banks and credit unions to begin your savings journey.

You can open a free Raisin account in just a few minutes!

Compare Rates

2. $500 Mini Saving Challenge

Learning how to teach yourself to save is one of the hardest things for my readers to do. So, they love these easy milestone challenges

This $500 mini savings challenge is a simple yet effective strategy to begin accumulating a substantial nest egg. This challenge requires you to systematically set aside a predefined amount each day, week, or month, consistently working toward a $500 goal.

Expert Tip: For the $500 Mini Saving Challenge, set a weekly savings goal and commit to reducing unnecessary expenses to manage and accumulate your targeted amount effectively.

3. 10 Week Saving Challenge

Kick-start your savings journey with an invigorating 10-week savings challenge. This feasible initiative can boost your bank balance and cultivate a savings habit.

As James Clear states in his famous bestselling book, Atomic Habits, it takes 21 days to build a new habit.

The challenge will triple your dedication as you will be setting aside a predetermined sum each week for ten weeks. The amounts could steadily increase to enhance the yielded savings.

Week 1 – Save $10
Week 2 – Save $15
Week 3 – Save $20
Week 4 – Save $25
Week 5 – Save $30
Week 6 – Save $35
Week 7 – Save $40
Week 8 – Save $45
Week 9 – Save $50
Week 10 – Save $55

By the end of your 10-week tenure, you will have amassed a handsome total of $325! This challenge is particularly beneficial for beginners who are striving to enforce a strict savings regimen.

Then, you can move on to our popular 52 week money saving challenge and choose the proper amount for you.

Expert Tip: Use a calendar or a mobile application to track your savings and keep you motivated throughout the challenge.

4. Mini Birthday Fund

Like a little surprise gift to yourself, the Mini Birthday Fund Challenge is for those who want to ensure they have a little extra cash to celebrate their special day in style. This delightful savings plan can be started at any time of the year, but the closer to your birthday, the more urgent the catch-up.

The plan is intuitive. Choose a monthly savings goal—say, $20—and diligently tuck away that amount every week or month until your birthday arrives. Then, voila! You have a mini birthday fund to splurge on a rewarding gift or experience gift for you. My personal favorite is spa time!

This is self-care and financial discipline bundled into one smart package.

Expert Tip: You can modify the amount you need to save and the total you need to save.

Our Top Pick

CIT Bank

Hailed for its competitive APY rates and digital ease of use, GOBankingRates named CIT as one of the Best Online Banks for 2022.

Earn one of the nation’s top rates.

Pros:

Daily compounding interest.
No account opening or maintenance fees.
Your deposits are FDIC insured.
Deposit checks remotely.
Make transfers with the CIT Bank mobile app.

5. The Penny Challenge

The Penny Challenge further simplifies savings. Plus you will be AMAZED at how much you can save with this simple penny challenge.

Every day you will save one more penny than the day before, yes, just one more penny. That will equal $667.95 in a year.

You can collect all the pennies you acquire and store them in a jar. Once your jar fills up or you hit your 365 days, deposit the pennies into your savings account.

Note: Though the denomination is small, you’ll be surprised at how much you can amass over time. Remember that every penny counts!

6. 365-Day Nickel-Saving Challenge

The 365-Day Nickel-Saving Challenge is perfect for those who like a daily commitment. Start on day one with a deposit of $0.05, and each following day, add a nickel to the previous day’s savings.

By day 365, you will deposit $18.25, accumulating a total of $3339.75 for the year. It’s a manageable and rewarding way to save.

7. The Dime Challenge

The Dime Challenge is similar to the Penny Challenge but uses dimes instead. Though the denomination is small, you’ll be surprised at how much you can amass over time.

Each day you will save ten cents or a dime more than the previous day, by the end of the year, you will save $6,679.50.

Day 1 – Save $0.10, Day 2 – Save $0.20, Day 3 – Save $0.30, and continue for 365 days

Collect all your dimes in a jar, and when it fills up, deposit them in your savings.

10X Effect: This challenge can help you save more money, more quickly than the Penny Challenge because dimes are worth ten times as much as pennies.

8. Dollar Savings Challenge

The $1 Savings Challenge is all about setting aside every single $1 bill that comes your way.

This is a great challenge if you use the cash envelope method for budgeting.

Even if you do this for just three months, you can save up to $1,000. It’s simple — every time you find a $1 bill, put it in your savings jar. This method makes saving money entertaining and gratifying.

9. The $5 Challenge

The $5 Challenge is similar to the $1 Challenge, with just a slight increase in the amount. It involves saving every $5 bill you come across.

Once again, better for those who use cash. But, you still can transfer $5 at intermittent increments to a separate online savings account.

The money saved from this challenge depends on how often you use cash and the duration of your challenge. It’s a doable and straightforward approach to savings.

Raisin

Simply select one of the high-yield savings products offered by their network of federally insured banks and credit unions to begin your savings journey.

You can open a free Raisin account in just a few minutes!

Compare Rates

10. 25 Envelopes Challenge

Another popular choice is the 25 Envelope Challenge which is a simpler version of the 100 Envelope Challenge. You get 25 envelopes, number them from 1-25, and each day, choose an envelope at random and put in an amount equivalent to the envelope number.

By the end of the challenge, you will save $325 in less than a month.

This challenge makes saving money unpredictable and exciting, leading to substantial savings over time. Next, you can try the 50 envelope challenge.

11. The Spare Change Challenge

The Spare Change Challenge involves saving all your loose change in a jar or piggy bank. Once the container fills up, deposit the savings into your bank account.

You’ll be surprised at how quickly the change adds up! However, this challenge works best for those who frequently use cash.

Tip: Don’t be afraid to pick up spare change on the ground!

Our Top Pick

CIT Bank

Hailed for its competitive APY rates and digital ease of use, GOBankingRates named CIT as one of the Best Online Banks for 2022.

Earn one of the nation’s top rates.

Pros:

Daily compounding interest.
No account opening or maintenance fees.
Your deposits are FDIC insured.
Deposit checks remotely.
Make transfers with the CIT Bank mobile app.

12. Round Up Savings Challenge

The Round Up Savings Challenge is best suited for card users. Whenever you make a purchase, round the figure to the nearest dollar and deposit the difference into savings.

For instance, if you spend $17.50, round it up to $18 and save the remaining 50 cents. It may seem small but will accumulate over time.

Go Digital: You can easily do this with the Acorns app.

13. No-Spend Challenge

The No-Spend Challenge encourages participants to avoid spending any extra money beyond the essentials for a set time. This involves taking a “financial fast,” where any non-essential spending is put on hold.

As such, this is one of my personal favorites, especially for those new to budgeting. It really helped me grasp what I truly needed to spend money on and what I didn’t. The same is true for all of my readers. The savings from this challenge can be substantial.

You can tailor the time frame to your own liking — try a no-spend day, week, or even month. Learn more about the no spend challenge.

14. No Eating Out Challenge

A no eating out challenge serves as an excellent tool to realize your spending habits as it eliminates the often overlooked cost of frequently dining out, enabling you to save more than expected. Right now, the average person spends $166 per month with most average costs in the $10-20 range.²

Combating your habit of eating out can lead to considerable savings, hence the No Eating Out Challenge. Under this challenge, you commit to avoiding restaurants, takeaway, and delivery for a set period, typically a month. The money saved from not dining out is then transferred into your savings, leading to substantial amounts over time.

This challenge makes you conscious of your expenditure and allows you to understand the significant amount you can accumulate over a period, promoting better spending habits.

15. The Spending “Swear Jar” or “Bad Habit” Challenge

Implementing a swear jar or a ‘bad habit’ jar can serve multiple purposes effectively. Not only does it stimulate the accumulation of savings, but it also aids in the transformation of replacing a bad habit with a good habit.

The rule is simple – each time you indulge in a specified bad spending habit, like making an unplanned purchase, you deposit a set amount (like a dollar) into your “swear jar.” This challenge effectively boosts savings while reducing unwanted expenses.

This is a great tactic to reduce your variable expenses.

Bonus: Savings Percentage Challenge

Last, but not least, my personal favorite! Increasing your Savings Percentage challenge.

The Savings Percentage Challenge urges you to save a fixed percentage of your income, preferably 20% every month. By adjusting the savings percentage to your comfort level, this challenge provides adaptability and the potential for significant savings over time.

To encourage savings as a regular habit, increase your savings percentage by 1% each year or with any pay raises or expense reductions.

See how the saving percentages work.

Tips for Successful Savings Challenge

Tip #1 – Creating Your Savings Goals

Creating specific, measurable, achievable, relevant, and time-bound (SMART) savings goals is the first step to your savings success. Your goals could be anything, ranging from a weekend getaway to creating an emergency fund.

Having clear savings goals keeps you motivated, providing a sense of purpose and direction. Learn more about smart money goal setting.

Tip #2 – Establishing the Savings Timeline

Once you have your savings goal, establish a realistic timeline to achieve it.

If your goal is to save $1000 and you decide to save $100 per month, your timeline will be 10 months.
If you need to save $300 in 30 days, then you must save $10 a day.

Establishing a clear timeline helps you organize your savings efficiently and remain motivated in your journey.

Tip #3 – Automatic Savings

One area I always stress to my readers is to pay yourself first. This concept is to set money aside first when you get your paycheck.

Then, take it one step further and establish an automatic transfer from your regular account to your special savings fund each pay period or month. This way, you won’t have to remember to make the transfer yourself, and it becomes an out-of-sight, out-of-mind saving habit!

Tip #4 – Staying Motivated through the Challenge

Track your progress visually, say, by coloring a box each time you save is habit-worthy. Keep your progress chart somewhere easily visible. This practice makes tracking fun and keeps you encouraged to save more.

Our free resource library of printables is full of possible money saving challenge ideas!

Staying motivated throughout your savings journey is crucial. Plus, watching your savings grow over time can be incredibly satisfying.

Tip #5 – Adjust your mindset for Improved Savings

Achieving your savings goals is truly a mindset game. Instead of seeing savings as a subtraction from your income, adjust your mindset to view it as paying yourself first.

Moreover, remember not to beat yourself up over occasional slip-ups. Continue to focus on your goal and celebrate small achievements.

Every dollar saved gets you one step closer to your goal.

Extending the Mini Savings Challenge – What’s Next?

Once you have completed a mini savings challenge, take your saving habit to the next level. Assess your financial situation and savings goal to determine new challenges.

You could consider higher-value monetary challenges or extend the challenge’s duration. Remember, consistent saving habits can greatly impact your long-term financial health.

Maintaining consistency in saving money is a golden key to long-term financial health.

Here are our popular money saving challenges:

Regardless of the amount, the habit of regularly putting money aside significantly contributes to building considerable savings. Remember, it’s not always about how much you save, but how consistently you do it.

Consistently saving, even smaller amounts, can lead to substantial totals over time.

Download the Printable Savings Tracker

To make your savings challenge fun and interactive, download one of our free printable savings trackers. These printable trackers will help you visually track your progress, boosting your motivation.

Every time you save money, color in a box or check it off.

Seeing this visual representation of your savings grow is a fun, rewarding way to track your journey toward your financial goal. Once you reach your goal, start again and keep the momentum going.

**To access these free printable, you must subscribe to my newsletter and you will be emailed the password.**

Frequently Asked Questions (FAQs)

Yes, you can start a savings challenge at any time. There is no specified period or date to begin.

You can choose a day that suits you best and kick off your savings challenge. Remember, the important part is not when you start, but that you start – and consistently save.

Staying committed to your savings plan is primarily about discipline and motivation.

Personally, I visualize my financial goals and stay motivated by celebrating small wins. You can do the same thing.

Also, use a savings tracker to make your progress tangible and fun. Finally, involve family or friends in your savings challenge so you can motivate and encourage each other along the way.

Of the Mini Savings Challenges, Which Will You Try First

Embrace the journey of a savings challenge, enjoying the process just as much as the destination.

This is key to becoming financially stable. It’s not only about reaching your financial goal but also about developing lasting habits of financial discipline and stewardship. These mini savings challenges are a learning experience and remember, no matter the size of your savings, every step is a step in the right direction.

With the help of a mini savings challenge tracker, you can start small yet grow big in savings.

These mini challenges, though small-scale and manageable, can lead to a significant increase in your savings over time. More than that, they encourage the much-needed habit of saving regularly.

Get started on your savings journey, make it enjoyable, and watch your money accumulate over time.

Sources

FRED St. Louis Fed Ecomonic Data. “Personal Saving Rate.” https://fred.stlouisfed.org/series/PSAVERT. Accessed November 8, 2023.
US Foods. “The Diner Dispatch: 2023 American Dining Habits.” https://www.usfoods.com/our-services/business-trends/american-dining-out-habits-2023.html. Accessed November 8, 2023.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

November 24, 2023 by Brett Tams

The average American has less than $90,000 in retirement savings, as of mid-2023. That’s far below what many people will likely need, and many Americans aren’t really sure what sorts of goalposts or milestones they should be striving for by certain ages when it comes to saving for retirement.

It can be helpful to see how one compares to others in their age range. Averages can help investors see if they are on track to retire when they plan to. While each person is different in terms of their personal retirement goals, lifestyle, ability to save, and projected expenses, setting goals and benchmarks can help an individual figure out how much to save and where to put money for retirement.

Key Points

• The average American has less than $90,000 in retirement savings, which is less than what many people will likely need.

• Retirement savings vary by age group, with average savings increasing as people get older.

• By age 30, it’s generally recommended to save an amount equal to annual salary, and by age 40, three to four times annual salary.

• By age 50, it’s advised to have six times annual salary saved, and by age 60, eight times.

• Most Americans aren’t saving enough for retirement, and it’s important to create a retirement plan and consider personal goals and financial responsibilities.

Average Retirement Savings By Age

Below is a breakdown of retirement savings by age group, ranging from people in their 20s to people in their 70s.

Age Group	Average Retirement Savings
20s	$35,800
30s	$67,400
40s	$77,400
50s	$110,900
60s	$112,500
70s	$113,900

Average Retirement Savings in Your 30s: $67,400

Most Americans in their 20s and 30s haven’t reached their peak earning years, and many might be paying off student loans, and saving up to buy a house or have kids. Retirement isn’t always top of mind. But the earlier people can figure out which retirement plan is right for you and commit to actually starting a retirement savings plan, the more they will benefit from compound interest over time.

Recommended: How to Save for Retirement at 30

Average Retirement Savings in Your 40s: $77,400

Since most people are making more money at this age than they ever have, it can be tempting to spend it on fancy vacations, cars, and other things. Many people also have mortgages, families, and other big-ticket expenses during this time in their lives as well.

But those who put that money towards retirement may be able to reach their goals early and retire relatively young.

For men, these are peak earning years, as they tend to continue increasing their earnings until age 55. Women tend to reach their peak earnings much younger at age 44. Either way, retirement savings should be top of mind for people in this age group.

Average Retirement Savings in Your 50s: $110,900

At this age, some Americans are on track to reach their retirement goals, while others are far off. There are still ways to catch up, such as cutting unnecessary expenses, moving to a smaller home, or putting any additional pay, income, or bonuses into retirement accounts.

Average Retirement Savings in Your 60s: $112,500

Although the goal for many is to retire at around 60, many Americans have to keep working since they don’t have enough savings. In some cases, people plan on working at this stage of life anyway, so it’s not a bad thing. A lot of people work during retirement, although some do so out of necessity.

Ideally, working in later years of life is a choice and not a necessity. After this age, people tend to be spending rather than saving, so the average retirement savings amounts decline.

Retirement contributions tend to increase as people age partly because they are earning more and partly because they are thinking about retirement more.

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Ideal Retirement Savings Amounts by Age

Because the cost and standard of living varies so greatly, there aren’t clear dollar figure amounts that each age group should aim to have saved for retirement. But there are suggested guidelines.

• By age 30: It’s generally recommended that people save an amount equal to their annual salary by the time they reach age 30. That may not be a realistic goal for many people, but it can be a general guideline or goal to aspire to.

One way to achieve this is to save 10-15% of one’s gross income starting in their 20s. Some employers will match retirement contributions if employees save a certain amount each month, so it’s a good idea to contribute at least that much to take advantage of what is essentially free money.

• By age 40: It’s recommended that investors have three to four times their annual salary saved by age 40.

• By age 50: Investors are typically advised to have six times their salary saved by age 50.

• By age 60: It’s recommended that investors have eight times their salary saved by age 60.

• By age 67: Investors are typically advised to have ten times their salary saved by age 67. For example, if a 67 year old makes $75,000 per year, they should have $750,000 saved.

Is Anyone Saving Enough for Retirement?

Despite the above recommendations, most Americans don’t have nearly these amounts in their retirement accounts. A significant portion of Americans don’t have any retirement savings at all — and that includes Americans who are near retirement age.

So, while some people are saving enough for retirement, a lot of people aren’t. Social Security may not be enough for a lot of people to make ends meet, either.

Social Security and Your Retirement

It’s more important than ever to create a retirement plan and stick to it, because America is facing a retirement crisis. Social Security was designed to help people pay their expenses during retirement, but it currently pays less than half of the average retiree’s monthly expenses. As of mid-2023, the average Social Security payment is around $1,800 per month.

Best Ways to Save for Retirement

It can be stressful to feel behind on saving for retirement, but it’s never too late to start.

There are several ways to save for retirement — but a good place to start, if you haven’t already, is by creating a budget to track expenses. This allows you to see where your money is going and identify categories of spending that could be reduced, with the money redirected to a retirement savings account.

Some retirement plans also have catch up options for those who start late — typically, individuals older than 50 can contribute extra funds to their retirement accounts.

No matter how much you put aside for retirement, or whether you contribute to a traditional IRA or a Roth IRA, a 401(k) or an after-tax investment account, a good strategy is to automate savings. With automated savings, the money is deducted from your paycheck or your bank account automatically — making it easy to forget that the money was ever in the account in the first place.

The Takeaway

The average American has less than $90,000 in retirement savings, though the number varies depending on age groups and other factors. Knowing how much others in your age group are saving for retirement can help give you a sense of comparison, but it’s important to remember that most Americans aren’t saving enough.

There are a number of different formulas, calculations, and rules of thumb to help individuals figure out how much money they’ll need in retirement. While these figures can be helpful, it’s also important to take personal goals, financial responsibilities, and lifestyle into consideration.

Ready to invest in your goals? It’s easy to get started when you open an investment account with SoFi Invest. You can invest in stocks, exchange-traded funds (ETFs), and more. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

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Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Apache is functioning normally

November 21, 2023 by Brett Tams

Inside: Are you looking to achieve financial freedom? This guide teaches you the 12 habits you need along the journey. Learn how people changed their lives with simple steps of savings and minimized expenses.

Achieving financial freedom is often misconceived as simply accumulating great wealth.

However, as David Bach, a renowned financial expert and top-selling author emphasizes, “Financial Freedom is about a lot more than money, it’s about living a richer life.” Indeed, true financial freedom is not solely dictated by the figures in your bank account, but more by the ability to live life on your terms, unencumbered by financial restraints.

There are reasons financial freedom is a coveted goal for many. Having more than enough monetary resources to finance your desired lifestyle without being driven by the need to earn a certain amount every year can be liberating.

This post will explain financial freedom in-depth, its benefits, the keys, and simple strategies to attain it.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

What is Financial Freedom?

Financial freedom is understood in various ways depending on people’s personal goals and values. Essentially, it’s having ample savings, cash, and investments to live as desired, both presently and in the future.

Those who reach financial freedom find themselves in control of their money, not allowing it to control them. Imagine enjoying your favorite hobby, traveling, or simply relaxing without stressing about money.

That’s the essence of financial freedom.

Why is Financial Freedom Good?

Financial freedom is a game-changer. It gives you complete control over your finances, allowing you to make choices that align with your values and long-term plans.

Financial independence reduces anxiety tied to unforeseen expenses and offers a safety net during unexpected hardship. It also allows you to work on your terms, pursue passions, take risks, and ultimately, leads to a more fulfilling and happier life.

This is something I can attest to when my husband was able to leave a toxic work environment on his terms.

What is the key to financial freedom?

The key to financial freedom lies in attaining financial literacy, prioritizing your goals, and cultivating good financial habits.

This involves setting and being adamant about your life goals, living within your means, saving diligently, investing wisely, diversifying income streams, and regularly reviewing and adjusting your financial plan.

Control over your finances and informed decisions pave the way toward financial freedom.

12 Simple Strategies for Financial Freedom

Achieving financial freedom requires strategic planning and disciplined execution. It’s not just about earning more, but about saving wisely, spending judiciously, and investing intelligently.

This section introduces you to key strategies for securing financial independence, illustrating their importance and demonstrating their role in paving the way toward a stress-free financial future.

Remember, financial freedom is not just about an affluent lifestyle, but about taking control of your finances, making your money work for you, and living a life on your own terms.

Something we emphasize around here at Money Bliss.

1. Set Life Goals

Setting clear, tangible life goals — both big and small, financial and lifestyle — is the first step towards achieving financial freedom. These smart goals form the backbone of your financial plan.

For instance, you may aspire to own a house, increase your liquid net worth, or retire early. The more specific your goals, with concrete amounts and deadlines, the higher the likelihood of achieving them.

2. Create a Monthly Budget

Creating a monthly budget is an instrumental step towards financial freedom.

Start by taking account of all your income like your paycheck and expenses.
Identify non-essential items you can cut down, and set money aside for emergencies and savings.
Focus on mindful spending and curb the urge to splurge.

Following a monthly budget guarantees that all bills are paid, and savings are progressing at a solid pace. Get solid budgeting advice to help you get started.

3. Spend Less Than You Earn

To reach financial freedom, it’s fundamental to spend less than you earn. This tip may seem overly simple, but it lays the foundation for wealth accumulation.

I cannot stress this concept of spending less and saving more enough. By reducing discretionary expenses and embracing frugality where possible, you maximize savings.

This doesn’t mean an austere life but simply cutting back on unnecessary expenses to create more room for savings and investments.

4. Invest in Your Future

Investing is a path towards creating wealth for your future. Even small amounts invested wisely can have big results, thanks to the power of compound interest.

Whether it’s real estate, the stock market, or mutual funds, investing can generate an income stream and significant long-term growth. This also means increasing your financial literacy to bring direction and discipline to your investment journey.

Learn how to start investing 10K.

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Whether you want to:

Retire in peace without financial anxiety
Pay your bills without taking on a side hustle
Quit your 9-5 and do what you love
Or just make more than your current income….

Making $1,000 every.single.day is NOT a pie-in-the-sky goal.

It’s been done over and over again, and the 30,000 students that Teri has helped to be financially independent and fulfill their financial dreams are my witnesses…

5. Stay Educated on Financial Issues

Staying attentive to financial news and developments is crucial. Knowing current trends can aid in timely adjustments to your investment portfolio.

Staying educated on financial issues and increasing financial literacy is an effective step toward achieving financial freedom. This includes acquiring competencies in areas such as understanding debt, budgeting, keeping track of cash flow, and investing wisely.

From changes in tax law to swings in the stock market, keep informed to make well-rounded financial decisions. Remember, knowledge is your best protection against fraud or investing missteps.

6. Develop Passive Income Streams

In your hunt for financial freedom, developing passive income streams can be a great advantage.

Passive income refers to earnings derived from a rental property, selling printables, or other enterprises in which you’re not actively involved. This could be writing a book, starting a blog, or investing in stocks.

These income streams can dramatically boost your earnings and aid your journey to financial freedom.

7. Diversify Your Investments

Diversifying your investments is a key strategy to mitigate risk and potentially increase returns. Remember the statement of don’t put all of your eggs in one basket.

Portfolio diversification involves spreading investments across different asset classes – such as cash, stocks, bonds, and real estate. Diversification ensures downturns in a single area won’t devastate your finances.

The best tool to track your investments would be Empower and you can use it for free.

Empower

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As a free app, Empower can help you to save money, save time, and even make more money.

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Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.

8. Maintain Your Property and Health

Maintaining your property and health is vital to your financial wellness. Regular care and maintenance for your properties, like homes and cars, help prevent expensive repair costs in the future.

Investing time and effort in your health, with regular doctor visits, a healthy diet, and exercise, prevents long-term costly health issues, securing your financial future. This is why I decided to share my spinal fusion journey to help others because your health is vital to your wealth.

This investment is integral to a life of financial freedom.

9. Build a Retirement Savings Plan

Building a robust retirement savings plan is a significant step towards financial freedom. Contributing to a 401(k) or an IRA can lead to tax advantages while saving for retirement.

Here is the key to success: don’t wait to start saving for retirement until you feel like you have extra money lying around. Because that will never happen.

Start simple by maxing out your Roth IRAs and contributing enough to your employer’s 401k to receive any matching. Initiate early and let the compounding interest work in your favor for a secure retirement fund.

10. Calculate Your Financial Independence Number

Your financial independence number is a benchmark for your financial freedom goals. I’ll be honest this is one of the hardest things to do is calculate how much you need to retire.

Recently, I had a conversation with someone who retired early and she said it is so hard to know how much you need and then also live off your savings.

However, calculating this FI number can provide a roadmap for your financial freedom journey.

11. Increase Your Income

Increasing your income can expedite your journey to financial freedom. Around here at Money Bliss, we stress the need for multiple streams of income.

Consider asking for a raise, taking on more responsibility at work, or learning new skills to command a higher salary.
Explore side hustles fitting your skills and interests. This may lead to a new career for you!
And don’t forget about passive income.

Generating more income not only enhances your lifestyle today but also boosts your savings and investments for a financially free tomorrow.

12. Regularly Review and Adjust Your Financial Plan

Your financial plan is not a static document but a living, changing guide. As your life and goals evolve, so should your financial strategy.

Regularly reviewing your plan helps assess your progress, make necessary adjustments, and keep you focused on your financial freedom journey.

This is something you need to prioritize on your calendar.

Dealing with Debt in the Path of Financial Freedom

Our journey of student loans was deeply intertwined with our pursuit of financial independence as we wanted more money in our budget. This systematic approach not only expedited our progress but also instilled a discipline that prepared us for a future of responsible financial decisions.

While not easy, it is best to pay off debt sooner than later.

Prioritize Paying Off Debts

Addressing debt is imperative on your financial freedom journey. Prioritize paying off debts, particularly high-interest ones. This could mean scaling back your lifestyle temporarily.

You might find strategies like the debt snowball method, paying off the smallest debts first, effective. Or the debt avalanche as we chose. Find out which way to debt payments is best for your situation.

Clearing debts reduces monthly bills and creates more room in your budget for saving and investing.

Minimize Reliance on Borrowings

If you are consistently relying on debt methods to make ends meet, that needs to stop. Instead of taking loans for significant purchases, it’s more beneficial to accumulate savings first and then purchase in cash. For instance, when looking at car loans, the interest rate is pretty high, so this is a great example to save first.

This is backward of what most people do. However, it provides wise decisions with your money like having an emergency fund to fall back on.

Just to note… for most people, a mortgage may be cheaper than renting in their area.

Commit to Debt Free Living

Committing to a debt-free lifestyle is not about sacrificing everything today for tomorrow, but about making smarter financial choices. These include fully paying off credit cards each month, preparing a budget and sticking to it, and systematically paying off any existing debts.

Over time, these actions lead to a reduction or elimination of debt contributing significantly to your financial freedom.

Achieving Financial Freedom: Success Stories

There is no shortage of inspiring stories of people going from rags to riches or overcoming financial hardships to achieve financial freedom.

One notable example is the story of Grant Sabatier, who went from having only $2.26 in his bank account to reaching financial independence in just five years.
Similarly, Kristy Shen was an ordinary programmer who quit her job and, with calculated financial decisions, managed to retire as a millionaire.
Farnoosh Torabi, a celebrated financial correspondent, was once overwhelmed by $30,000 in student loan debt. Through disciplined budgeting and effective money management, she was able to shake off the chains of debt and now leads a financially free life.
Likewise, Robert Kiyosaki, the author of “Rich Dad Poor Dad,” started his journey with little and is now known for his financial education organization.

There are numerous success stories affirming the attainability of financial freedom. These success stories inspire and offer valuable insights into achieving financial freedom.

Frequently Asked Questions (FAQ)

Financial freedom means having sufficient savings, investments, and cash at hand to afford the lifestyle you desire without being burdened by economic constraints.

In essence, it’s about more than just having money – it’s about having financial choices, control, and security to live life on your own terms, both now and in the future.

Achieving financial freedom isn’t about get-rich-quick schemes. Instead, it typically involves a combination of saving, investing, and increasing your income.

This can mean anything from asking for a promotion at work or starting a side business to investing in stocks or real estate. Building multiple income streams, particularly passive ones, and maintaining a disciplined budget can significantly speed up the journey.

The amount of money required to attain financial freedom varies from person to person, as it’s highly dependent on individual lifestyle aspirations and expected annual expenses.

A general rule is to multiply your expected annual income by 25. For example, if you need $50,000 a year for your dream lifestyle, your financial freedom amount would be $1.25 million. It’s crucial to reassess this number regularly and adjust for changes like inflation. Learn more on saving for retirement.

Create Financial Freedom Journey for Yourself

Achieving financial freedom is a journey, not a destination. It demands consistent effort, discipline, and wise decision-making.

Every step you take towards reducing debt, saving, investing, or earning more income brings you closer to a life self-directed rather than dictated by economic constraints.

You have the opportunity to change your family’s future for many generations to come.

Although challenges will arise, remember, as Arthur Ashe once said, “Start where you are. Use what you have. Do what you can.” With determination, you can achieve financial freedom.

Start by learning to become financially independent and grow from there.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

November 18, 2023 by Brett Tams

Owning your own home is typically a foundation of the American Dream, and many people are saving for a down payment right this minute. But when you are already paying rent, it can be a challenge to save for a down payment on a house, especially if you live in an area with a high cost of living or are dealing with the impact of inflation.

But that doesn’t mean it can’t be done. You can save up for your home purchase by following some wise financial advice and simplifying the process of socking away your cash.

If buying a home is a priority for you, read on. You’ll learn how to grow your down payment savings while still paying rent.

5 Tips to Save for a Home While You’re Still Renting

Rent can take a big bite out of your take-home pay, but it doesn’t rule out saving for a down payment on a house. Here’s some smart budgeting advice to help you set aside money for your future homeownership.

💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.

1. Pay Down Your Debt First

In order to save for a house, it’s wise to figure out a plan to pay down your existing debt. This will free up more money for you to save for that down payment. Also, when you do apply for a mortgage, you will likely have a lower debt-to-income ratio, or DTI ratio. Reducing you DTI ratio can help your application get approved.

Student loan debt is a common kind of debt to have; the average American right now has $37,338 in loans. If you’re a full-time employee, reach out to your company’s HR department to learn more about student debt repayment assistance. A recent survey by the Employee Benefit Research Institute found that 17% of companies in the U.S. currently have this type of assistance, so it’s worth a try.

Gain home-buying insights
with the latest housing
market trends.

As a more drastic measure, you could always think about going into a profession that offers partial or total student loan forgiveness (such as teaching in certain public schools) or moving to a state that will help pay off your student loan debt just for moving there (currently Kansas, Maine, Maryland, and Michigan).

For an easier fix, you could consider student loan refinancing options, which might lower your rate. By dropping your interest rates, you could significantly reduce both your payments and the length of time you’ll be making them.

However, a couple of points to note. If you extend your term to lower the payment, you will pay more interest over the life of the loan. Also, do be aware that, when refinancing federal loans to private ones, you may then no longer be eligible for federal benefits and protections. However, by getting a lower interest rate, you may accelerate your path to saving for your down payment and getting keys to your very own home.

Credit card debt can also play a role in preventing you from saving for a down payment. This is typically high-interest debt, with rates currently hovering just below 25%.

There are a variety of ways to pay down this debt, such as the debt avalanche method, which has you focus on your highest-interest debt first; the debt snowball; and the debt fireball methods.

If none of these techniques seems right for you, you might look into getting a balance transfer credit card, which will give you a period of zero interest in which you may pay down debt. Or you might take out a personal loan to pay off the credit card debt and then potentially have a lower interest loan to manage.

2. Create a Budget That Will Help You Spend Less and Save More

Another way to free up funds for that down payment is to budget well. Creating and sticking to a realistic budget can help you spend less while saving for a house. While budgeting can sound like a no-fun, punitive exercise, that really doesn’t have to be the case. A budget is actually a helpful tool that allows you to manage your income, spending, and saving optimally.

To get there, you can pick from the different budgeting methods. Most involve these simple steps.

Gather your data: Figure out how much you’re earning each month (after taxes), along with how much you’re currently spending. Add it all up including cell phone bills, insurance, grocery bills, rent, utilities, your coffee habit, the dog walker, gym membership, etc. Don’t miss a dime.

List your current savings: Are you currently putting money into an IRA, 401(k), or other savings plan? List it, so you can see what you’ve already got in the bank.

Really dig into and optimize your spending: Can you cut back anywhere? You might trim some spending by bundling your renters and car insurance with one provider. Perhaps you can save on streaming services by dropping a platform or two. And how’s your takeout habit? If you really want to save for a house, you may need to learn to cook. You might even consider taking in a roommate or moving to a less expensive place to turbocharge your savings for your down payment while renting.

Making cuts, admittedly, can be the toughest step in the budgeting process, but it’s crucial to be honest with yourself about your spending. Remember: However much you cut back can help you get a new home that much sooner.

Finally, check in on your budget every so often and adjust as needed. For example, if you land a new job, get a promotion, or are given an annual raise, perhaps you can add that money to your savings account or put it toward paying off your loans. Whichever one feels more important to you is OK, so long as that extra cash isn’t vanishing on impulse buys.

3. Investigate How Big a Down Payment You Actually Need

Many prospective homebuyers think they must have 20% down to buy a house, but that is not always the case. That is how much you need to avoid paying for private mortgage insurance (PMI) with a conventional conforming loan. Private mortgage insurance typically ranges from 0.5% to 2% of the loan amount, and it’s automatically canceled when your equity reaches 78% of the home’s original value.

Here are some valuable facts: You may be able to take out a conforming loan with as little as 3% down, plus PMI. Certainly, that’s a sum that can be easier to wrangle than 20%, though your mortgage principal will be higher. According to National Association of Realtors data, the average first-time homebuyer puts down about 6%.

In addition, you might qualify for government loans that don’t require any down payment at all, such as VA and USDA loans.

You might also look into regional first-time homebuyer programs that can provide favorable terms and help you own a property sooner.

💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as little as 3.5%.

4. Grow Your Savings

If you’ve paid off your debt, set realistic budgeting goals, and are raking in some dough to add to a savings account, you’re already on the right track. A good next move is to put your money to work for you. Among your options:

• Open a high-interest savings account. These can pay multiples of the average interest rate earned by a standard savings account. You will frequently find these accounts at online vs. traditional banks. Since they don’t have brick-and-mortar branches, online financial institutions can save on operating costs and can pass that along to consumers. Just be sure to look into such points as any account fees, as well as opening balance and monthly balance requirements. (Features such as round-up savings can also help you save more quickly.)

You can also look into certificates of deposit (CDs) and see what interest rates you might get there. These products typically require you to keep your funds on deposit for a set period of time with the interest rate known in advance.

• If you have a fairly long timeline, you might consider opening an investment account to grow your savings. The market has a historical 10% rate of return, though past performance isn’t a guarantee of future returns. You could try using a robo advisor, or you could work with a financial advisor who will walk you through investment strategies for beginners and beyond and help you invest. Just be aware that investments are insured against insolvency of the broker-dealer but not against loss.

Recommended: First-time Homebuyer Guide

5. Automate as Much of Your Finances as Possible

This is a lot of information to process, but once you get through all the work upfront, you can start automating as much as possible. For example, have a portion of your paycheck automatically go into your savings account each month to plump up that down payment fund.

You might set up the direct deposit of your paycheck to send most of your pay to your checking account and a portion to a savings account earmarked for your down payment. You can check with your HR or Benefits department to see if this is possible.

Another way to automate your savings is to have your bank set up a recurring transfer from your checking account, as close to payday as possible. That can route some funds to your down payment savings without any effort on your part. Nor will you see the cash sitting in your checking account, tempting you to spend it.

The Takeaway

While saving for a down payment isn’t exactly a piece of cake, it doesn’t have to feel overwhelming. By trying five effective strategies, which can include budgeting, paying down debt, and automating your savings, you can accumulate enough money to start on your path to homeownership.

Once you have the down payment taken care of, you’ll be ready to shop for a home mortgage that suits you.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

SoFi Student Loan Refinance
If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

SOHL1023251

Source: sofi.com

Apache is functioning normally

November 18, 2023 by Brett Tams

Inside: Are you struggling to make ends meet on a low income? This guide will teach you how to budget money effectively on a low income, so you can live a comfortable life without having to skimp on important expenses.

Let’s face it… Navigating through the budgeting on a low income can often feel overwhelming.

The fear of insurmountable bills, the anxiety associated with rising living costs, and the overall foreboding nature of budgeting often make for a persistently stressful experience.

However, it is crucial to understand that you are not alone in this journey. I have been in your spot as well as many Money Bliss readers.

Regardless of how daunting the budgeting task may appear, we truly believe that with the right guidance and adherence to solid financial principles, you are capable of achieving financial peace of mind.

This process will simply require patience, persistence, and strategic planning. This guide aims not only to shine a light on the struggles of budgeting with a low income but also to offer a beacon of hope.

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

How to Budget Money on a Low Income

While it’s true that budgeting with a low income can be tough, proper money management can make it doable.

When you have less disposable income, it leaves you with less leeway in your budget. That’s why you have to be accountable and meticulously plan your spending to ensure financial stability.

So, let’s dig in and you can find success.

Step #1 – Figure out Your Monthly Income

Developing an effective budget starts with understanding your monthly income.

Here’s a step-by-step guide:

List out all income sources: This includes all your regular paychecks, part-time jobs, side hustles, social security, child support, or any other form of income you have. If your income is irregular, say from commissions or seasonal work, it’s advisable to base your budget on your lowest monthly income.
Account for taxes and deductions: To get an accurate picture of your disposable income, you need to factor in taxes and deductions from your earnings. You need to make sure you understand the difference between gross pay and net pay.
Include irregular income: If you occasionally get money from gifts, or sporadically earn from passive income sources like investments, be sure to include these too. As these are inconsistent, it is best to fund discretionary spending with this money.

Personally, I recommend using your net income with budgeting. This will give you an accurate budget that you can truly follow.

This knowledge is powerful when it comes to effective budgeting.

Step #2 – Define your bills and Expenses

Knowing how much you spend and what you spend your money on is another crucial step in budget planning.

The key is to define ALL your bills and expenses. Here are the personal budget categories that cover almost everything you can think of.

Now, you must do the following:

Identify your fixed costs: These are basics that you have to pay monthly and remain fairly constant, such as rent, car payments, and student loans.
Consider flexible costs: These expenses vary from month to month. Examples include groceries, transportation, electricity, water, and gas bills.
Remember periodic costs: Some costs only appear annually or semi-annually. For instance, insurance premiums, car registrations, and property taxes. It’s important to set aside money each month to cover these expenses when they arise. A sinking fund is great for these expenses.
Account for daily spending: Beyond fixed and flexible bills, consider your day-to-day expenses like shopping, subscriptions, and entertainment. Be honest about the little expenses. It’s often the small, frequent purchases that can derail a budget.
Prepare for unplanned costs: Finally, remember to budget for unexpected expenditures such as car repairs or medical bills.

By defining and categorizing your bills and expenses, you can see where your money is going and better manage your spending.

Step #3 – Reach a Zero Budget

A zero-based budget is a strategy that requires you to assign every dollar you earn to a specific expense or savings category, with the goal of having your income minus your expenses equal zero by the end of the month.

Write down your income: From the step before, you already know your total monthly income.
Subtract your expenses: Subtract the total of your monthly expenses (including savings) from your total monthly income. If you’ve correctly accounted for your income and expenses, the result should be zero. This is what it means to have a “zero-based budget”.
Balance the budget: If your income and expenditure don’t balance, adjust your variable expenses and other discretionary spending until they do. This can involve cutting back on nonessential overspending, like takeout meals or unnecessary purchases.
Allocate every dollar: With your budget balanced, each dollar should now have a purpose, whether it’s paying bills, going into savings, or providing for your daily needs.

Many people struggle to hit a zero based budget on the first try. It is common for your expenses to be higher than your income. Thus, a no spend challenge may help you identify what is important to actually spend your money.

Reaching a zero-based budget equips you with a clear picture of your financial status.

Thus, it allows you to use your money purposefully and prevents unnecessary spending. This way, even with a low income, you can still meet all your needs and work towards your financial goals.

What do you do if your budget shows your expenses are more than your income?

When your monthly spending exceeds your monthly income, immediate attention is needed to prevent worsening financial issues. Before panic sets in, consider taking the following steps:

Analyze your budget: Reevaluate and scrutinize your budget. There might be necessary adjustments overlooked or expenses incorrectly categorized. This will give you a clearer understanding of where your money is going.
Prioritize essential expenses: Allocate money to necessities like housing, food, utilities, and debt repayments first. Other less necessary expenditures, like entertainment and dining out, can be reduced or eliminated.
Reduce expenses: After prioritizing, identify areas where cuts can be made. Impulse buys, unnecessary subscriptions, or expensive habits might need to go.
Increase your income: Consider part-time jobs, side hustles, selling unused items, or picking up freelance work to bring in more money.
Seek advice if debt is weighing you down: As a last resort, you may look at ways to lower your interest rate on your debt. These strategies like debt consolidation or restructuring could help make your situation more manageable.

Remember, this situation, while stressful, is not permanent. With careful planning and disciplined execution, you can turn this around and regain financial stability.

Taking Control of Your Budget When Income Doesn’t Cover Your Expenses

Now, this is where you need to learn to manage your money wisely. You are in control of where you spend your money.

Many truly believe with a higher income all of their financial problems go away. From my research, most people end up with bigger money problems, the same spending habits, and still living paycheck to paycheck even with a higher income.

So, let’s reign in what you can do today to make your budget feasible.

1. Prioritize Essential Bills and Expenses. The key is to identify which expenses are truly essential to your livelihood. All remaining expenses, like entertainment or eating out, should be considered secondary and only met after the primary expenses have been satisfied.

2. Participate in a No Spend Challenge. A No Spend Challenge not only helps you save money rapidly but also makes you cognizant of your spending habits, helps identify non-essential expenses, and guides you towards a minimalist, sustainable lifestyle. Start with a no spend month.

3. Reduce your Housing Expenses. Housing costs can be one of the most significant expenses. Look at ways to downsize, negotiate rent, refinance your mortgage, or get roommates. Or even housesit permanently.

4. Be Cognizant of Bad Spending Habits. Some examples include impulse purchases, expensive convenience, not comparison shopping, or paying too much. By becoming aware of your spending habits and making conscious choices, you can break the cycle of unnecessary spending and start saving money with the penny challenge.

5. Skip the Expensive Coffee Shop. Choosing to forgo your daily coffee shop run can result in surprisingly significant savings. Implementing just this one change could save you over $600 a year!

6. Use Public Transportation to Save Money. The costs of owning a car – gas, maintenance, parking, and insurance – can quickly add up. So, look for public transportation as an alternative or even cycling, carpooling, or walking.

7. Take Advantage of Free or Cheap Entertainment. When living with a low income, entertainment expenses can quickly eat into your budget. Good news for you! There are plenty of things to do that don’t cost money.

8. Cut Back on Grocery Spending. By implementing simple strategies such as meal planning, cooking at home, cutting down on processed food and reducing waste, you can maintain a healthy diet while significantly reducing your grocery bills. Don’t forget to use those discounts and coupons!

9. Stick to Your Shopping List. Preplan your purchases before stepping into a store. This is a powerful tool in curbing those impulse purchases which can inflate your expenses substantially.

10. Start Meal Planning. Meal planning is a practical and economical way to manage your food budget. By planning your meals for the week, you can control your grocery spending and eliminate waste.

11. Stockpile Goods That Will Stay Stocked Up Long Term. Remember, the goal of stockpiling is to save money, not to transform your home into a supermarket. Purchase enough to last a few months and focus on items that you’re certain to utilize. Here are the best foods to buy when broke.

12. Pack Your Own Lunch and Skip Eating Out. With an average meal out costing around $10, you could easily save $200 a month by packing lunch from home. Over a year, that’s $2,400 in savings!

13. Drink Water and Avoid Processed Foods. Shifting dietary habits can be a significant change, but your commitment to a healthier lifestyle can reap both health and financial dividends. It’s an investment in a life of wellness and economic sustainability.

14. Take Advantage of Discounts when Shopping. Remember, the goal of shopping with discounts is to spend less on what you need, not to buy more than you need. So, make sure to use coupons wisely, shop sales, buy off season, and use Cashback apps like Rakuten and BeFrugal.

15. Avoid Impulse Purchases. By avoiding impulse purchases, you give your budget room to breathe and create an opportunity for savings. This makes a significant difference over time, especially when money is tight.

16. Apply for Discounts on Utilities and Services. Many utility companies provide low-income home energy assistance programs. The same is true for internet service. Contact your service providers to check your eligibility.

17. Get Free or Discounted Goods Through Charities. Charities, faith, professional, and local organizations often offer grants for people experiencing financial hardship. Utilizing them can be a lifetime as they help you stretch your budget further and provide necessary support in times of financial struggle. Don’t be afraid or too proud to ask for help when you need it.

18. Get Outside. Reconnecting with nature can provide you with cost-free entertainment and a sense of tranquility that’s hard to find elsewhere.

19. Avoid Unnecessary Expenditure. While each person’s definition of “unnecessary” may differ, the key to budget management is curbing expenditures that don’t add substantial value to your life. A common culprit could be brand-name goods or late fees.

20. Start the Practice of Saving with a Mini Savings Challenge. The Mini-Savings Challenge can pave the way to a habit of saving regularly, even on a tight budget. Essentially, this challenge consists of setting aside a small amount of money each day or week, gradually increasing the amount over time.

21. Show Gratitude. While it may seem less directly related to finance, practicing gratitude is indeed integral to efficient budgeting and financial wellness. Remember, financial success isn’t just about making more money. It’s also about appreciating what you have and recognizing the steps you’re taking towards your goals.

Inciting Additional Income Avenues

Okay, this section is how you take a low income and increase your money. While cutting back spending is helpful, creating more money will help you to reach money success faster. This will take the strain off.

1. Look for Ways to Earn Extra Income

Boosting your income, no matter how minimal the increase, can help cover necessary costs and elevate your financial standing.

Here are some ideas using your current job:

Work Overtime: If possible, consider getting more extra hours at your current job. Earnings from overtime or extra shifts can be significant.
Negotiate a Raise: If you’ve been with a company for a while and demonstrated your worth, it might be time to discuss a raise. Prepare well for this conversation with evidence of your productivity and value.

Every extra dollar earned can be put towards savings, paying down debt, and creating better financial stability.

2. Leverage Side Hustles for Extra Money

Side hustles have become an increasingly popular way to earn extra money online in your spare time. They allow for flexibility and can be a great supplement to your current income.

Start a Side Hustle: These can be a great way to make use of spare time to earn extra cash. This could be anything from driving for a rideshare company, offering freelance services, tutoring, delivering food or groceries to selling homemade goods online.
Sell Unused Items: You probably have items in your home that you no longer need. Selling anything from clothes to electronics or furniture can be a good source of income.
Passive Income: From writing an eBook to renting out a room in your house or investing in stocks, creating passive income streams can provide extra money over time.

Remember to choose a side gig that fits your schedule, interests, and skill set. Not only could it bring in extra money, but it could also turn into a passion project, making the work feel less like a chore.

3. House Sit for Extra Income

House sitting can be a viable option for those looking to generate extra income, especially if you’re flexible with your time and location. It typically involves looking after someone’s home (and sometimes their pets) while they’re away.

Not only is house-sitting a way to earn money, but it can also offer a free place to stay. Hello – you just lowered the biggest expense in your budget. However, remember that taking care of someone else’s home is a huge responsibility, so only take on tasks you’re confident you can handle.

Get started by building your profile on Trusted Housesitters.

4. Items You Don’t Need Anymore

Selling items you no longer need or use can both declutter your home and add to your income. It doesn’t just have to be big-ticket items; even small routine household items can yield returns.

While this may be difficult to do, look for items in good condition that you and your family no longer need or use. If you have extra baby stuff, you can rent it on BabyQuip for extra money.

Remember, while selling items won’t provide a consistent income, it can be a great one-time source of extra cash especially if you have these highly popular flipping items in your house.

Baby Equipment Rentals with BabyQuip

Have you heard about BabyQuip? They are the #1 baby equipment rental service offering clean, safe, and insured baby gear.

Whether you are traveling or just don’t want to purchase, this is a great idea to check out.

Learn More

5. Pick up a Part-time Job

When you’re on a limited income, picking up a part-time job can be a reliable way to supplement your earnings. You are trading your time for money.

Many of these jobs that pay weekly offer valuable experiences, skills, and possibly even room for growth and advancement. Remember to save and plan for any taxes due as a result of your increased earnings.

Smart Use of Technology in Budgeting

Taking advantage of personal budgeting tools can make managing your finances easier. They can help track expenses, create a budget, and set saving goals. Here are some popular options:

You Need a Budget (YNAB): YNAB helps you create a budget and live within your means, educating you on effective money management along the way.
Simplifi by Quicken: This app crunches the numbers to show how much money you have for day-to-day spending after accounting for bills, goals, and savings.
Empower: This free tool offers a comprehensive financial dashboard that includes budgeting features and investment tracking.
Tiller Money: If you want a more manual approach, you can use Google Sheets or Excel to create a customizable budget spreadsheet.

Remember, the best tool is the one you use consistently. Try a few options to see which one best meets your needs and preferences. Every tool has its pros and cons, but all aim to help you control your finances effectively.

Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.

Our Top Pick

YNAB

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Comprehensive approach to budgeting, helping you plan monthly budgets based on your income.
Offers expert advice, making it suitable for those who require an in-depth, forward-thinking budgeting strategy.
Superior synchronization skills make it the winner in this area.
YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
Option to manually add and upload transactions from accounts each month.
YNAB prioritizes user privacy.

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YNAB vs Mint

Access Paychecks Early with Digital Banking Apps

With the rise of digital banking, access to innovative financial tools like early direct deposit has become more accessible, even for those with low incomes. These services can be crucial lifelines between paychecks or in case of emergencies.

Here are a few platforms that offer such services:

Chime: Once you set up direct deposit with Chime, you may get your paycheck up to two days earlier than at a traditional bank.
Current: Current, a mobile bank account, provides users with paychecks up to two days in advance.
Varo: Varo also offers early direct deposit for its users, helping you gain access to your money more quickly.
Clair: Clair’s on-demand pay solution lets you advance a portion of your paycheck before payday. This can be particularly helpful when navigating financial crunches.

It’s important to note that while accessing your paycheck early doesn’t give you extra money, it does provide more flexibility in managing your finances and can help avoid overdraft fees or high-interest loan options in times of need. As with any financial tool, it’s essential to use early paycheck access wisely and not rely on it for regular spending.

Current | Future of Banking

Build your money future with Current. Get paid faster, build your credit history, earn points, and more – all in one place.

Plus boost your savings with high interest rates on your savings, save automatically with Round-Ups, set your goals, and more.

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FAQs

Saving money on a low income can seem challenging, but a few strategic changes and smart habits can make it achievable.

Engaging in a money-saving challenge can be a motivating way to encourage disciplined saving, helping you to creatively manage your finances and significantly boost your savings plan over time.

Remember, the key to saving on a low income is to stay consistent, patient, and adaptable in your approach.

Surviving on a low income budget can be challenging, but strategic planning and careful spending can help you manage your finances effectively.

The focus as Dave Ramsey likes to say is on your four walls – food, utilities, shelter, and transportation.

Remember that it’s okay to adjust your budget as you go. Circumstances change, and so should your budget. Review your budget regularly to ensure it’s still working for you and adjust as needed.

Budgeting when you’re broke might seem like an uphill battle.

The key is to make sure you stick to your budget and track your spending consistently. Don’t hesitate to reach out to local charities, government programs, and non-profit organizations for assistance.

Remember, being broke is often a temporary situation, and even small steps towards better budgeting can compound into big changes over time. Try to stay positive and focused on your financial goals.

Now, How do you Survive on a Low Budget?

Surviving on a low income involves careful planning, budgeting, and making the most of available resources. While it may seem challenging, it is indeed possible.

Every small step you take towards frugal living, such as sticking to a budget, reducing unnecessary expenses, or earning extra cash, can lead to considerable savings in the long run.

Remember, it’s also important to invest in yourself – whether that’s asking for a raise at work, learning a new skill, or starting a side hustle.

The journey of living on a low income can be tough, but it also offers an opportunity for creativity and gratitude for the essential things in life. With a positive mindset, some patience, and careful budgeting, you can not only survive but thrive, even on a low income.

The goal isn’t to just get by but to build a financially stable future.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

November 15, 2023 by Brett Tams

Home prices are on the rise again, especially in large metro areas, after a lull leading into 2023. Seven cities, including Atlanta, Charlotte, Detroit, and Miami are at all-time highs as measured by the Case-Shiller U.S. National Home Price NSA Index. So saving for a down payment for your first house can be tough. This is especially true if you’re trying to buy that first home while you also have student loans to pay off. And if you’d like to purchase that home super fast before prices soar higher, it can feel impossible.

But here’s the good news: It’s definitely doable, even within just 12 months, if you accelerate your savings and prepare wisely. Follow our strategy below to take that big step into home ownership fast.
💡 Quick Tip: When house hunting, don’t forget to lock in your home mortgage loan rate so there are no surprises if your offer is accepted.

Months 1–3: Save Like You’ve Never Saved Before

Do the Math

The median home price in the U.S. in late 2023 was $431,000. Saving 10% for a down payment on a home at that price is far more manageable than following the old 20%-down school of thought, especially when you have student loans to pay off. To succeed at saving $43,100 in a year’s time, you’ll need to save $3,592 a month, which seems slightly more plausible if you take a breath and break it down into 52 weeks, at $829 a week. Of course, you’ll want to crunch the numbers for the type of home you’re looking to purchase. If you can find a well-priced property and put even less than 10% down, you may need significantly less cash on hand.

But don’t put your calculator away yet.

In addition to saving for the down payment, you’ll need to factor in closing costs, which typically amount to about 3% of the home price. So for a home that costs $431,000, you would need to add $249 to your weekly savings goal.

Yeah, that’s a big chunk of change. But don’t panic; the first step is always the hardest. Just imagine yourself landing your first job or hosting your first big party. You managed that and you’ll manage this too. And remember to consider student loan refinancing, which can help lower your interest rate, monthly payments, and ultimately save you money.

Revise Your Budget

Hunker down and take a hard look at your budget. If you’ve decided to refinance your student loans, don’t forget to adjust your monthly fixed expenses to account for your lower payments. Compare your income and expenses to get a clear view of your spending habits, and then make the necessary changes to meet your weekly savings goals.

Look closely at your expenses to see what you can give up to increase your savings, and what costs you can cut back on. Can you join a rideshare group to save on gas? Part with a streaming subscription or two? Also, consider setting limits on eating out and buying clothing or gadgets you don’t really need.

Recommended: Home Affordability Calculator

Flex your Negotiation Muscles

Put your savvy bargaining skills to use to get lower interest rates on existing credit cards and auto loans, or discounted rates on subscription services.

Start a Home Fund

Open a savings account just for your down payment, and avoid dipping into it. This will help you keep careful tabs on your progress.

Reach out to Your Family and Friends

Within your 12 months of saving, you’ll have a birthday and celebrate gift-giving holidays. Let your friends and family in on your major goal of buying a house, and ask that they contribute money toward a down payment in lieu of material presents.

Just remember that if you receive unusually large sums or a large number of deposits in the months leading to your home purchase, you may need gift letters from the generous people in your life, indicating that there is no expectation of repayment. Depending on the mortgage loan, rules vary when it comes to how much of your down payment can come from gifts.

Months 3–6: Keep Saving. And Focus on Earning More

Ramp up Your Income

Think of creative ways to use your expertise and skills to boost your income. You did invest a substantial amount of time and money in your education, after all, so maximize the ROI to rake in some extra cash to put toward your home fund.

Perhaps you can roll out an e-course or teach a professional seminar at your local community college. Or look for a way to make extra money from home. And, if the time is right, ask for a raise.

Months 7–9: Build Your Credit (and Keep Saving)

Review Your Credit Report

Check your credit report to make sure it is error-free and that your credit score is as high as it can be. And mind the cardinal rule of credit scores: Pay your credit cards, student loans, and bills on time.

Check your credit utilization ratio (the amount of your credit card balances against their limits), too; you want that number to be low.

Now is also the time to be wary of applying for new lines of credit, as that will result in lenders doing a “hard pull” on your credit. Too many of these within a 6-month time frame could ding your credit score.

Recommended: First-Time Homebuyer Guide

Keep an Eye on Your DTI

Make sure your debt-to-income ratio (DTI) is as low as possible. Your DTI is a key part of securing a home mortgage loan, and while the lower the better, it should fall below 36% — although for certain types of mortgage the DTI can be as high as 43%.
💡 Quick Tip: Don’t have a lot of cash on hand for a down payment? The minimum down payment for an FHA mortgage loan is as low as 3.5%.

Months 10–12: Learn About the Mortgage Process (While You Keep Saving)

Do Your Mortgage Application Prep

Your mortgage company will require quite a bit of paperwork to get your loan approved. Familiarize yourself with the mortgage loan application process. Also check your credit score once more to make sure it’s still solid.

Explore Homebuyer Assistance Programs

There are many different programs designed to help first-time homebuyers gain access to home ownership. A loan from the Federal Housing Administration, for example, may help you purchase a home even if you haven’t saved a heap of cash for a down payment or if your credit score isn’t at the highest level.

If a fixer-upper is your goal, a HUD loan may be worth exploring. And depending on where you’re looking to buy, you might find city- or state-specific homebuyers assistance programs.

The Takeaway

Saving for a down payment and the associated costs of buying a home is a big endeavor, but with persistence and discipline, both in terms of your spending and your home-search process, you can find a home and have the down payment necessary to purchase it. The same careful planning that got you to college and helped you secure a student loan will help you achieve your dream of becoming a homeowner.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.

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Source: sofi.com

Apache is functioning normally

November 5, 2023 by Brett Tams

About one in seven Americans has unclaimed funds lurking somewhere. In fact, there’s an estimated $70 billion in unclaimed assets in the United States. Typically, the amounts people receive when retrieving this money can be small (say, $20) or, in rare cases, it can be a significant amount of six figures or higher.

States typically manage these funds, which can come from forgotten bank accounts, pensions, insurance benefits, wages, savings bonds, and other sources.

If you’re wondering whether there’s any money out there that belongs to you, read on. This guide will walk you through where unclaimed money may be hiding and how to claim it.

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How to Find Unclaimed Money 5 Ways

Money usually remains unclaimed because owners have no idea it exists. That’s why it may be worth searching for unclaimed funds in your name just in case. So how do you go about it? Unfortunately, there’s no single place you can look for all potential unclaimed cash. It may take some work, but here are some steps you can take to help make sure you’re claiming everything that’s yours.

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1. Searching State Databases

A good first step may be to hunt for unclaimed funds at the state level. Each state has an office that oversees unclaimed property, typically housed in the state treasurer’s, controller’s, or comptroller’s office. You can link to your state by visiting the website unclaimed.org, which is run by the National Association of Unclaimed Property Administrators.

Don’t forget to search your name in the database of each state where you have lived, not just the one where you live now. Make sure that you are searching the official state site (it should have .gov in the URL) to avoid scams. If you are married and changed your name, you may want to consider searching under your maiden name too.

You can continue your search by checking MissingMoney.com, which offers a multi-state database endorsed by the National Association of Unclaimed Property Administrators.

All of these searches are free to complete. If someone asks you for money to complete a search, that’s a red flag. There’s no reason to pay to access money that’s yours, unless there is a small processing fee.

If you happen to find unclaimed property, each state has its own process for proving that you’re the true owner and getting your hands on the cash. Many states allow you to file a claim electronically.

Usually you need to provide some kind of official documents to prove that you’re the person named as the owner. Luckily, there is typically no time limit for claiming the money. If the owner has died, you can often claim funds from a deceased relative. You can typically file a claim if you’re an heir, trustee, or executor of the estate.

2. Looking for Unpaid Wages and Pensions

Here’s another possibility in terms of how to find unclaimed funds: Hunt for back pay. If your employer owes you back wages, you can search the Department of Labor’s database. Start by inputting the name of the employer. You typically have to move quickly in this case, since the agency only keeps unpaid wages for three years.

You can also look for pensions from a former employer. Pension funds may be unclaimed if a company closed its doors or ended a particular pension plan. You can look for funds through the website of the Pension Benefit Guaranty Corporation, which is a government agency.

3. Checking for Unclaimed Tax Refunds

If you think you may have failed to receive a tax refund at some point, you can track that down through the Internal Revenue Service’s website. Keep in mind that you will need to know the exact refund amount in order to conduct the search.

4. Searching for Insurance Funds

Many insurance companies transfer unclaimed funds to states, but a couple of federal government agencies maintain their own unclaimed funds databases. The U.S. Department of Veterans Affairs holds onto unclaimed VA life insurance funds for most policyholders and, if they’re deceased, their beneficiaries.

People who had mortgages insured by the Federal Housing Administration can check for potential unclaimed refunds on the website of the U.S. Department of Housing and Urban Development.

5. Finding Savings Bonds

Another potential place to find unclaimed funds could be in forgotten or lost savings bonds. To check whether you have a bond that has reached maturity, check the government’s website Treasury Hunt. You’ll be prompted to enter your Social Security number and your state.

The site also offers advice on finding lost, destroyed, or stolen savings bonds.

• FDIC and Closed Banks You may also want to see if you have any money that is in a lost bank account or one that was held at a now-closed bank. It’s a very rare occurrence, but bank failures do occasionally happen. If you believe you had funds in one that you never received, you can contact the FDIC Claims Depositor Services at 888-206-4662, option 2.

💡 Quick Tip: Want a new checking account that offers more access to your money? With 55,000+ ATMs in the Allpoint network, you can get cash when and where you choose.

Being Aware of Scams

Where there’s free money, there are bound to be con artists trying to take advantage of it. Some companies may offer to help you find unclaimed funds and recover the money for a percentage of the amount owed you. Be cautious: These can be scams. Paying these fees is pointless, since you can search for unclaimed property and reclaim it for free (or perhaps for a small processing fee to the state).

The IRS recently warned of another kind of unclaimed money scam, in which a letter arrives, claiming to be from the government, alerting you to a refund you have not yet accessed. This fraudulent communication then says that your banking details are needed to receive the money. If you send that sensitive information, you could end up losing money and having your accounts compromised.

Using Your Unclaimed Money

If you happen to be one of the lucky people who finds cash waiting for them, what should you do with it? You may be tempted to blow the surprise windfall on those new shoes you’ve been eyeing or on a dream vacation.

But depending on the sum you receive and your financial situation, there may be smarter ways to put the unexpected money to use. Consider these possibilities.

Paying Off Debt

If you have high-interest debt, many people suggest putting much of your extra cash toward knocking it out. That’s because interest rates can cause a balance to balloon significantly over time, meaning the longer you wait to pay off your high-interest debt, the more you’ll likely pay overall.

Credit cards and payday loans tend to have high interest rates, but you may also want to check the rate you’re paying on your student loans, car loan, personal loan, or mortgage. One method for potentially paying off your debt faster is to tackle your highest-interest debt first, while staying on top of minimum payments for your other liabilities.

Building An Emergency Fund

Once you’re on top of your debt or at least the highest-interest liabilities, it may be a good idea to establish or pump up an emergency fund.

Financial experts suggest having enough saved to cover three to six months’ worth of living expenses.

It may be a good idea to keep this money in a safe place, like a high-interest savings account, for unexpected emergencies such as car repairs, medical bills, or a layoff. Having an emergency fund may help you avoid getting into high-interest debt in the future since you have that cash cushion to see you through challenging times.

Saving for a Goal

Once you have a basic emergency fund, you may want to start setting aside money to get closer to a big financial goal. Maybe you want to have a wedding, travel, start a business, or buy a home.

Saving in advance means you may need to take out less in loans or pay less in credit card charges. Or you might be able to avoid them altogether, keeping more of your money in your pocket.

Investing for the Future

Another option is to invest your money in an individual retirement account, college savings plan, brokerage account, or another financial vehicle.

Investing your money for the long-term could allow you to take advantage of the power of compounding returns and potentially increase your chances of reaping solid growth over time. It can be tempting to spend your lucky find on short-term fun, but investing may set you up for financial freedom in the future.

Recommended: Weird Ways to Make Money

The Takeaway

How do you find unclaimed funds? Typically, it involves searching on websites to see what pops up. These are usually specific to the kind of money that is sitting unclaimed, whether that means going searching for tax refunds, the contents of closed bank accounts, back wages, or insurance payments.

Whether it’s deciding what to do with reclaimed cash, if you’re owed any, or figuring out how to afford a big goal, life poses plenty of personal finance challenges. Finding the right financial partner can be an important step in making your money work harder for you.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is the best website to find unclaimed money?

Using a website to find unclaimed money will depend somewhat on the source of the unclaimed funds, such as whether it’s from an insurance claim, a forgotten safety deposit box, or other source. One good place to start can be unclaimed.org, which is run by the National Association of Unclaimed Property Administrators.

What happens if money is unclaimed?

When money is unclaimed, it often goes through a dormancy period (perhaps five years), after which the state takes control of the funds.

How do you claim unclaimed money from the IRS?

If you were expecting a federal tax refund and didn’t receive it, visit the IRS’ Where’s My Refund page and/or call their helpline at 800-829-1040. For state taxes, contact your local Department of Revenue by checking this website.

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOBK0923018

Source: sofi.com

Apache is functioning normally

October 29, 2023 by Brett Tams

You may not think of saving money as being a creative pursuit, but with a little effort, you can find fresh (and even fun) ways to help you stash away some cash. This can make the pursuit more engaging and motivating.

Perhaps your goal is to save for the down payment on a house or build up your kid’s college fund or simply take a great vacation next year. You can try some clever methods to make saving money more interesting and maybe a bit exciting.

Read on to learn such tactics as partnering up with a savings buddy and tapping your DIY skills. You’ll also learn ways to make the most of the cash you sock away. Get set to save more.

15 Creative Ideas to Save Money

You are probably familiar with some of the usual tactics for saving money, such as comparison shopping and clipping coupons. If you’re ready to mix things up and try some less common tactics, consider the following 15 quirky but effective ideas.

1. Identifying Your Saving Goals

2. Finding a Saving Buddy

3. Seeking Out Free Activities

4. Getting Creative and DIY

5. Gamifying Savings

6. Swapping Goods and Trading Skills

7. Increasing Income

8. Switch Your Bank

9. Split Your Direct Deposit into Checking and Savings

10. Change Your Due Dates for Bills

11. Save Every $5 Bill

12. Take Advantage of Cash Back Credit Cards

13. Round Up Your Purchases Automatically

14. Consolidate Credit Card Debt with a Personal Loan

15. Automate Your Savings into an Investment Account

💡 Quick Tip: An online bank account with SoFi can help your money earn more — up to 4.60% APY, with no minimum balance required.

1. Identifying Your Saving Goals

Not sure how to make saving money fun or prioritize it? You could start by identifying your goals. Are you saving up for a big purchase, like a down payment on a house? Are you saving for your child’s future education?

Once you’ve figured out what you want to accomplish, you could determine a target amount of money you’d like to save. While this number might change over the course of your savings journey, you can always readjust your plan.

If you have an idea of how much money you’d like to work toward saving, you can consider diving deeper into your finances to pinpoint realistic objectives. You can use a tracking and budgeting tool, such as SoFi Insights, to get a big-picture snapshot of your money and drill down on ways to save.

Once you’ve reviewed your individual financial circumstances and have a better idea of your savings goal(s), you could try these fun ways to save money.

2. Finding a Saving Buddy

With the right company, even the most mundane tasks can be enjoyable. You could talk about your savings goals with your friends and family members to potentially identify a saving buddy with similar objectives.

An ideal saving buddy will be supportive of your financial goals, offer good advice, and have a positive money mindset.

Checking in with your buddy regularly could help keep you both stay on track and you can celebrate each other’s accomplishments. This person might also be able to talk you down if you’re on the verge of making a big impulse buy. If you’re stressed about how to make saving money fun, you could brainstorm creative tactics with your saving buddy and implement them together.

3. Seeking Out Free Activities

Saving money does not have to be synonymous with missing out on exciting opportunities around you. You could enjoy free activities offered in your area.

Perhaps your local park offers free theater performances or concerts in the summer, or your area bookstore hosts interesting literary panels and author discussions with no attendance fee. Think about the resources provided by your local library, such as book clubs, language exchange programs, craft nights, and movie screenings.

This can be a great option to pricey movie or concert tickets. And here’s a way to save money on streaming services: You could try a free service like Hoopla or Kanopy, which are offered at no cost to library card holders.

4. Getting Creative and DIY

Here’s another clever way to save money: Adopt a DIY (do-it-yourself) attitude. You could create things using materials you already own instead of buying new products. You can save money on food by meal-prepping for the week ahead; think about recipes that incorporate ingredients you already have in your pantry.

You could make your own household cleaners out of vinegar, lemon rinds, and herbs or face masks using fresh ingredients like avocado, tea, honey, and oatmeal. There are ways to reuse materials that might otherwise be thrown out or recycled: Newspapers and coupon booklets could make fun wrapping paper, for instance.

5. Gamifying Savings

If you’re looking to break up the monotony of saving, you could consider incorporating games and challenges into your overall savings plan. A friendly competition with your saving buddy could be seeing who can save the most money every week, month, and/or year.

Creating small rewards for reaching your goals might be an incentive, too. (Bonus points if these rewards are free!) No-spend weeks, where you refrain from spending any money for seven days, also might help with saving. If you succeed at that, you might want to ramp up to a 30-day no-spend challenge. You can tailor this to cut down on all discretionary spending or just a single category, such as dining out.

6. Swapping Goods and Trading Skills

Getting serious about saving money doesn’t mean you need to give up “luxuries” such as exercising, new clothes and accessories, or home goods. Trading skills and swapping goods are two potential examples of how to make saving money fun while not depriving yourself of the things you want.

You could go to your favorite yoga studio and ask if they have a work-trade program where you can do administrative duties in exchange for classes. A clothing swap with your friends could refresh your closet at no cost.

You might also consider an informal exchange with skilled friends. For example, if you’ve been eyeing an original painting from your artist pal but don’t have the funds to pay her, you could offer your website design services (or some other helpful skills) for the painting.

7. Increasing Income

Sometimes, cutting down on expenses might not be the most effective way to reach a savings goal. It might be easier, in some cases, to make a bit more money than to reduce costs, especially if you are spending more than 50% of your income on non-discretionary expenses like groceries and debt payments. (That’s the figure established by the popular 50/30/20 budget rule, that half of your take-home income goes toward necessities.)

You could reflect on your particular skills and/or hobbies to see if there is a way to translate one of them into an income stream. For example, if you love to knit, you could start an online store for your yarn creations. Or you could offer your writing or editing services in a freelance capacity. A successful low-cost side hustle could help bring additional money into your bank account and add more fun and enjoyment in your life.

Recommended: 39 Passive Income Ideas to Build Wealth

8. Switch Your Bank

If your financial institution seems to be charging you endless fees and offers little interest on your savings account, consider switching banks.

You might consider an online bank. Because these institutions don’t have brick-and-mortar locations to fund, they can pass those savings along to customers in the form of lower or no fees and higher interest rates.

You might also consider a credit union instead of a big name bank. Credit unions are run as financial co-ops, meaning each member has a stake in business. As nonprofits, they are designed to serve their members, typically paying higher interest rates on deposits and charging lower fees.

Ready for a Better Banking Experience?

Open a SoFi Checking and Savings Account and start earning up to 4.60% APY on your cash!

9. Split Your Direct Deposit into Checking and Savings

If you have regular paychecks, one of the easiest ways to start saving a bit more money is to guarantee some automatically ends up in a separate savings account, making it that much harder to spend. If you have a checking account, odds are you have a savings account too, or at least access to one.

Maybe you find it hard to remember to put some money away into savings or harder still to force yourself to part with it. If so, splitting your direct deposit into two accounts helps make sure your savings grows every paycheck, without you needing to worry about transferring the money. Check with your HR department or your online pay system to see if you can add a bank account and designate a certain amount of each paycheck to go into your savings account as part of your direct deposit.

Most banks also have the option to set up recurring transfers yourself between your accounts. If you don’t have the option to split up your paycheck or would prefer not to, your bank can likely automate your savings with a transfer the day after you get paid. You won’t have to think twice about stashing money away.

💡 Quick Tip: As opposed to a physical check that can take time to clear, you don’t have to wait days to access a direct deposit. Usually, you can use the money the day it is sent. What’s more, you don’t have to remember to go to the bank or use your app to deposit your check.

10. Change Your Due Dates for Bills

Having extra money in your savings account doesn’t help if you are constantly pulling from it to pay bills.

If you are overdrafting frequently or borrowing from savings, especially at certain times of the month when big payments are due, consider this unique way to save money: Change the due dates of some of your bills. Sometimes spreading out your larger payments — like credit card bills or student loans — throughout the month can help when those more inflexible due dates, like rent, roll around.

By changing the date of some of your bills, you will hopefully avoid overdraft or NSF fees. This will encourage you to not touch your savings account, as opposed to pulling from it every time your checking account balance gets precariously low.

11. Save Every $5 Bill

This is a classic adult remix of the piggy bank you had as a kid. Only this time, instead of squirreling away quarters, take every $5 you get and put it in a separate drawer at home. Keep all of these $5 in the back of a closet somewhere, tucked away and out of sight.

Once you get into the habit of identifying $5 as “no spend” bills, you’ll find it can really be a creative way to save money — depending on how much cash you use in a typical day, of course.

The benefit of this method is that $5 isn’t really enough to miss if you are just putting away a bill or two, but that at the end of the year, it can easily add up to enough cash to help with holiday shopping, a loan payment, or even a nice charity donation without having to touch your savings in the bank.

12. Take Advantage of Cash Back Credit Cards

Need another clever way to save money? Simply put, if you have a credit card that has a decent rewards program, you can likely get your rewards in cash. While getting cash back won’t boost your savings directly, it can allow you to spend rewards points instead of your savings.

However, if you tend to carry over a balance on your credit card, cash back cards may not be a good solution for you right now.

13. Round Up Your Purchases Automatically

There are plenty of apps available to round up your purchase to the nearest dollar and then save the change for you. Your bank may offer this kind of savings tool, which can be an easy way to save money automatically.

The amount these apps save for you is small, so you aren’t likely to notice $1 or even a few cents when it transfers, but it can add up to hundreds stashed away per year.

14. Consolidate Credit Card Debt with a Personal Loan

If your credit card debt is preventing you from saving as much as you would like, you might use a personal loan as a creative way to shake up your finances.

If you owe money on more than one credit card or have a high balance relative to your credit limit, the rates on a personal loan could help lower your monthly payments. Often, taking out one personal loan to pay off credit cards can help you with savings in the long run. While you’ll still be paying off the personal loan, the interest rate is likely to be significantly lower than that of the credit cards. That means you can probably pay off the total sooner, leaving more cash free for savings.

15. Automate Your Savings into an Investment Account

It’s the age-old financial advice worth repeating here: If your company offers a match on your 401(k) savings, take advantage of it! If your company match is 6%, you should set your contribution for at least 6% to get the most out of your retirement funds.

It can be simple to creatively save money using the following technique. Most company wealth management accounts can be set to automatically deduct contributions from your paycheck, but you can schedule other automatic investments too. You can make scheduled, recurring transfers between your bank account and your wealth management account.

You get to select the dollar amount, the date and the frequency you want. This is a great way to put your savings to good use — send it into an investment account. There are plenty of other technologies available to help make this easy, too.

Why Is Making Saving Money Fun Important?

Trying tactics like the ones above can help make it fun to save money. That’s important for a couple of good reasons. Shaking up your savings routine can make socking away cash seem fresh and more engaging, meaning you are more likely to get the job done. Basically, it can rev up your motivation to save money.

Also, when you find a technique that is fun, such as a no-spend challenge, it can help encode the new savings behavior in your routine. If it’s enjoyable, you are more likely to keep up the good work.

How Can You Make the Most of the Money You Save?

When you save money, you likely want it to grow over time, not just sit there. One good way to do that is to stash your money in an interest-earning account. This will be especially effective if the financial institution where you save charges low or no fees and doesn’t have high minimum opening deposit or balance requirements.

You might look for a high-interest or high-yield savings account. These can pay a significantly higher rate than standard savings accounts, and your money will be accessible and likely insured by the Federal Deposit Insurance Corporation, or FDIC, or NCUA (the National Credit Union Administration).

Optimizing Your Savings

Beyond the creative ways to save that you just learned, there are other important ways to optimize your savings.

• Budgeting wisely can help you better understand your personal finances. It can help you get a grip on your earnings, spending, and savings. When you see where your money goes, you can tweak your spending to help funnel more towards savings.

• Putting a spending limit on your credit card (or cards) can help you rein in spending, which can reduce high-interest credit card debt and allow you to save more.

• Lastly, it you are struggling to put away money, one dramatic move that can help you save more is to move to an area with a lower cost of living. Whether that means moving across town or across the country, it could make a major difference in your finances.

The Takeaway

Putting away money for your future does not need to be a boring task; there are countless fun ways to save money that could be customized to your specific financial needs and wants. From finding a savings buddy to gamifying your saving, creative tactics can help enhance your motivation and your ability to put away cash.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

Better banking is here with up to 4.60% APY on SoFi Checking and Savings.

FAQ

What is a clever way to save money?

There are several clever ways to save money. Automating savings so you don’t have to remember to transfer funds is one good tactic; so is giving yourself a no-spend challenge, finding free activities, and doing a skills swap to reduce spending.

How can you save $1000 in 30 days?

To save $1,000 in 30 days, you can try a spending freeze, a savings challenge, and/or use a card that gives you cash back. Make sure you are keeping the money you save in a high-yield savings account.

What is the 50 30 20 rule?

The 50/30/20 budget rule is a popular technique for managing your money. It advises spending 50% of your take-home pay on the needs of life (housing, food, healthcare, etc.), 30% on the wants in life (such as dining out, Ubers instead of public transportation, travel, and so forth), and 20% goes into sayings.