When it comes to saving money, the best time to start was yesterday. But today is pretty good, too! It may feel like you have no money to save when you’re just starting out, but even a small amount of cash put away on a regular basis can add up to a respectable amount over time. Here are seven smart money habits worth practicing at any stage in life.
1. PLAN OUT YOUR MEALS.
Feeding yourself without keeping an eye on your budget is a quick way to blow money—something that comes as a shock to many people leaving the nest for the first time. Instead of going out to eat every other meal or spending money on more perishable groceries than you can possibly consume, take the time to plan out your meals. Only buy the ingredients for the dishes you actually plan to cook that week and save takeout meals and restaurant trips for special occasions. You’ll be surprised to see how much better off your bank account will be because of it.
2. DON’T MAKE A HABIT OF DIPPING INTO YOUR SAVINGS.
A savings account doesn’t serve much of a purpose if you’re taking more money out of it than you’re depositing into it. You should only dip into your savings for serious emergencies. Medical issues, damage to your property or vehicle, and sudden unemployment are all situations where a hefty amount of savings can come in handy. In order to have that cushion to fall back on, make sure that your daily spending comes from your checking account.
3. SET UP AUTOMATIC DEPOSITS TO YOUR SAVINGS ACCOUNT.
When looking at your monthly expenses, it’s important to budget money for savings just like you would food, gas, or utilities. If you’re employed part- or full-time and your salary is direct deposited to your checking account each month, consider setting up an automated transfer to your savings account. The amount doesn’t have to be large: If all you can afford to set aside is $20 per deposit, that’s better than saving nothing for the next five years.
4. SAVE YOUR SUPPLEMENTAL INCOME.
Whether you're a student or a recent graduate, there are plenty of opportunities to earn a little income on the side. Dog walking, babysitting, and freelancing in your field are all ways to supplement your regular income. And although you most certainly deserve a vacation right about now, consider sending it straight to your savings account. It may not sound like the most glamorous use of your extra cash, but you’ll reap the benefits in the long run.
5. KEEP A MONEY DIARY.
It’s hard to know how much money you should be saving without knowing how much you’re already spending. For one month, commit to writing down every transaction you make, from student loan payments to snack purchases. Once you have the full list recorded, you can decide which purchases were unnecessary and calculate how much money you would save without them. Go into the next month aiming to stick to the necessities and vow to put away whatever money you would have spent otherwise.
6. TAKE ADVANTAGE OF YOUR FULL BENEFITS PACKAGE.
If you’re employed full-time, you could be passing up free money through your employer without even realizing it. In addition to healthcare, vision, and dental, many companies offer money-saving perks like matching 401(k) programs, discounted gym memberships, and transportation reimbursements to their full-time employees. If you’re still a student, there are other ways to save cash that are unique to your situation. Museums, retail stores, and restaurants often offer student discounts. Don’t hesitate to ask lots of questions of your human resources rep (if you’re employed full-time), or of your campus’s student activities council. They’ll be able to point you towards benefits and discounts you didn’t even know existed.
7. SPLURGE RESPONSIBLY.
After weeks spent budgeting your meals, taking advantage of discounts, and padding your savings, it’s important to reward yourself for all that self-discipline. Rather than spending indiscriminately throughout the month, determine a set amount of money for splurging like you would with any other expense. This cash can be used for a spa day, a fancy meal out, or that pair of sneakers you’ve had your eye on for a while—all that matters is that you spend it guilt-free so you can jump right back into your money-saving habits the next day.