savings shortcuts

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Young and Thrifty: A Guide to Saving

A Guide to Saving for Young People: At Peace With MoneyRecently I’ve received some questions about financial advice for young people. I think the most important piece of advice I can give is this: save your money. It’s simple, but it can be difficult to get in the saving habit. That’s why I recommend developing a savings plan. There are three parts to a good savings plan: percentage, motivation, and banking.

Savings Percentage

In order to save money, it’s important to decide what portion of your money you want to regularly save. You can decide this in a variety of ways. If you’re in a situation where you don’t need most of your income for fixed expenses, the amount you can save becomes much more flexible. For example, when my younger daughter started working at our local pizza place, she decided she would save her paycheck and spend her tips.

Many sources recommend saving about 10% of your income monthly. If you have a fixed income, this can be calculated easily. With variable income, you can simply tally up what you’ve made and calculate the percentage each month. Use the other 90% of your income to live off of and cover your expenses. 

If you want to make things more  organized or complex, you can work on budgeting out your expenses. I’ll talk about different budgeting strategies in a later post.

Motivation

Having financial goals is important! Make sure you know what you’re saving for. Are you looking to purchase a car? Moving out? A  fund that will enable you to leave your job in case of  sexual harassment or unfair treatment? Having an intention for your savings is important because it helps keep you motivated. The more specific it is, the easier it is to focus on. For example, when my older daughter decided she wanted to take a 3 month road trip, she calculated how much she needed to save, got a job at a shoe store, and the next few months saving almost all of her income. She even lived on her friend’s couch for two months to save on rent. In the end, she saved all the money she needed and then some. That’s the power of motivation! 

Banking

Use a bank that earns you high interest on your savings and doesn’t charge fees. Doing some research to find a good bank will help you figure out where to put your money and watch it grow quickly. You can also read my tips for avoiding bank fees here

Some banks allow you to automatically transfer money to a savings account each month. Setting up that automation can make saving even easier. When you don’t even have to think about it, it’s much more likely to get done. 

A Guide to Saving for Young People: At Peace With MoneySaving is the best piece of financial advice I can give to young people. Getting in the habit of saving your money opens up a lot of choices, something that’s important and helpful in any young person’s life!

This post was written in response to some requests I’ve received for financial advice for young people. To answer these questions, I’ve created a series called Young and Thrifty. Check the tag Young and Thrifty to see other articles in the series. 


Angela

Image Sources: Jeremy Cai,  Sharon McCutcheon

A Few Easy Tips to Save Money by Picking Up the Phone

notebook phone and glasses on tabletop

I saved myself $200 with two phone calls in the past two days. Both took only 10 minutes and I made one while walking my dog. They were very little effort, but with a nice payoff.

Yesterday I made a call to my insurance company to let them know our 18 year-old daughter has just left for college without the car. She is still a covered driver, but since she’s not a daily driver our premium was reduced by $160 until our upcoming renewal.

Today I made a phone call to a rental car company to dispute a gas charge of $45. After hearing my explanation, they agreed to refund the charge.

I could have easily skipped making these calls, but I’m glad I didn’t. Sometimes saving money is as easy as picking up the phone. Think about your finances for a moment, and ask yourself – do you have any calls to make? Here are a few other tips to save money now or each month:

  • Check to see if you’ve received any wrongful overdraft charges or fees from your bank – many make mistakes all the time. Dispute these charges and get back what they owe you.
  • Call and find out how to avoid monthly fees from your bank.
  • If you’re paying a lot in credit card interest, remember that you have the right to call and negotiate new interest rates, or transfer your balance to an entirely different card. Look for one that has an introductory 0% APR.
  • Cancel unused club memberships and subscriptions for that gym you never use and that magazine you don’t read.
  • Take a look at your cell-phone bill and see if there are any services you don’t use and can stop paying for.

Save Money by Picking up the Phone Pin At Peace with Money

There are lots of little shortcuts and loopholes to saving money – just take a look at what you’re paying for and you’ll surely find something. A little extra cash is worth a few minutes on the phone! I hope you enjoyed these money saving tips and can put them to good use.

Photo source