While retirement may still be a few decades away, that doesn’t mean you should put off thinking about the future. Sure, whether or not is lyft cheaper than uber may be priority when thinking about going out this weekend, but the earlier you can start to save for retirement, the longer it has to grow over time and provide you with an adequate source of income to continue to enjoy life experiences without having to worry about working any longer. Becoming financially independent should become a priority, if it hasn’t already, in order to maximize your hard-earned dollars.
If you were asked how much you are currently spending on bills, let alone on food, gas, and spending money, would you be able to say? By taking a look at last month’s debit or credit card statement you can actually see line by line to what you’re actually spending, and that could be a little shocking when you finally start to add up the necessary vs. unnecessary expenses and see what you could still have in your bank account had you been able to avoid a few impulse purchases throughout the month.
As you start to free up extra money by reducing unnecessary purchases, it’s time to look at the monthly expenses you have that you may have to put in a little extra work to reduce. When it comes to cable, by escalating up the ranks and threatening to cancel, you can hope to lock into a new promo rate. With gas and electric you can take a look at electrical outlets, doors, and windows and make sure are all properly sealed in order to rid drafts and help from the furnace and air conditioner kicking on more than it should be.
Build an Emergency Fund
You never know what life will throw at you so it’s best to be as prepared as you can. By giving yourself a cushion of say, a few months’ worth of expenses, you can have the available funds on hand in case you get an unexpected vet bill, auto repair damage, or the need to replace a broken appliance. This way you can pay without putting on a credit card and risk the extra monthly payments throwing your budget out of whack. Keeping more than a few months in a low interest earning savings account could jeopardize any potential earning that could be gained in 401k or brokerage accounts.
Keep Up on Your Credit Score
You may not think of credit score being a factor in saving money, but if you think about how much your credit score factors into the interest rates of your mortgage, loans, or credit card, saving money on interest rate can save you hundred dollars a month, thousands a year, not to mention over the course of the entire mortgage. By pulling your credit report at least once a year and watching your credit score on monthly statements, you can make sure that all accounts are accurate and up to date.