5 Tips to Save More October 8, 2014My MoneyOff

Ladies, the time has come to look the ugly truth in the face. I’m not talking about coming to terms with not fitting into your old college jeans (they’re too faded anyway!); rather, I’m talking about…

Your hard earned money disappearing.

I can’t tell you how many 30 and 40 somethings are busting their butts and scratching their heads asking, “Where is all my money going?” They are earning great money yet don’t have much to show for it. You are not alone. Spending is going back to all-time highs with 35percent of Americans being chased by debt collectors, according to a recent study by the Urban Institute. Meanwhile, the Employee Benefit Research Institute 2014 Retirement Confidence Survey reports that half of workers age 55 and older have less than $50,000 in savings. This is not to be taken lightly. After all, without any savings you lose the advantage of compound interest and the potential to get richer faster, as well as the possibility of creating an investment engine that can spit out more money for you. Plus, you may have to kiss goodbye other things you want: the ability to pay down your debt, send little Junior to college with tuition help, have the flexibility to walk away from a job with an obnoxious boss, be able to one day do what you want all the time (aka retirement), enjoy vacations without racking up credit card bills, or have your Sex and the City moment of buying those Carrie Bradshaw look-alike heels without guilt.

But who wants to go on a budget. (Ugh!) Hey, I get it. Might as well go on a diet, cut out chocolate, and chew on barbed wire while you are at it! No thank you.

We, of course, know what to do, but it is that darn how to do it that is so difficult. Like losing weight, we know we should eat less and work out more. Similarly, when it comes to saving, we know we should spend less and save more. So how do we walk the walk (while in our Sharp Heels)?

Here are five steps to help you strut more confidently:

  • Make your success automatic. Why does automated online bill pay work so well? It’s automatic. Why do 401K plans work so well for people. They’re automatic. Why do we cringe when we see an ex? It’s automatic. You get the idea. So give yourself a better chance for financial success by having a set amount of money automatically withdrawn from your paycheck. You won’t miss the money you don’t see and it’s much less painful than manually transferring money. Depending on your situation, consider starting off with 5percent per month and gradually increasing this amount.
  • Choose a bank out in the boonies. Well not literally. But, select a bank you do not pass on your regular commute. The further away this bank is from you, likely the better. Keep the temptation away. It’s the same reason you don’t surround yourself with Nutella and warm, home baked cookies 24/7.
  • No debit card allowed. Again, don’t make it easier to get access to your money with an ATM on every corner. You want your money to accrue and bubble along so it is out of sight, out of mind, and out of your pocket.
  • No online access. Banks and credit card companies know what they are doing providing easy access to your money with transfer capabilities online and on your phone. That benefits them but probably not you.
  • Pay credit cards in full at the end of each month. It’s no good to cork one hole and not the other. You should control your future spending. Work on getting yourself down to one or two credit cards – max and cut up the others. Strive to make it a rule to never pay credit card companies their high interest rates ever again and pay your bill in FULL each month. Revert back to how your grandparents financed their expenses – If you don’t have the money, don’t spend it. That is what your savings are for – to borrow from yourself. Also consider using a charge card, as opposed to a credit card, that only gives the option to pay your bill in full each month. This is a great way to change your habits and get in the right mindset.

You can do this. You no doubt, have probably tackled harder challenges in your life. Don’t overcomplicate these steps and give yourself the relief of building toward your future. To steal a line from Kate Moss: “Nothing tastes as good as financial security feels.”

By Nora Yousif
Photo by B Hodanbosi

This article is provided by Nora Yousif, who has written for Sharp Heels and is a Financial Advisor at RBC Wealth Management in South Easton and was prepared by or in cooperation with RBC Wealth Management.  The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. RBC Wealth Management does not endorse this organization or publication. Consult your investment professional for additional information and guidance. RBC Wealth Management does not provide tax or legal advice.

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC

Share this Article

Recommended

See all
CLICK TO SUBSCRIBE to Your PINK eNewsletter.

What’s Hot
See all

Little Pink Book