You want to maximize your savings. You live on a small income. It seems like an impossible dream, right? But it isn’t.
Why is Maximizing Your Savings Important?
You need money to source your goals. And we all have goals. Let’s take some simple examples:
- Replacing your mattress
- Upgrading your wardrobe
- Buying a new car
- Moving out of your rental and buying your own home
- Better yet, moving to a new location to improve your lifestyle
- Replacing your poorly performing appliances
Yes, you could pay for these short-term goals with your credit card or consumer loans. But that would add to your debt. More debt means a lower credit score. A lower credit score means that everything is going to cost you a lot more in interest rates and fees. A bad credit score could even keep you from getting your dream job or apartment rental.
It’s better to save up and then buy.
You have long-term goals too, such as, possibly:
- Getting married
- Starting a family
- Going back to school
- Launching a business
- Traveling around the world
To actualize these goals, you need to save money.
And even if none of these goals are on your bucket list, there is still a very important reason why you need to save…emergencies.
Make 2020 be the Year You Maximize Your Savings
This is a great time of the year to think about how to get more money flowing to your savings accounts.
Did you make New Year’s resolutions last January? Were financial goals included on your list?
Look at your budget. Was it realistic? Did you follow it?
Did you meet your savings goals?
How about debt reduction?
And most importantly for 2020, did you stay within your 2019 holiday spending budget? Your 2020 will get off to a difficult start if you begin with debt accumulated from your holiday fun.
Now, during the final days of 2019, you can reflect on the year and dream about how you want 2020 to look. Celebrate your 2019 accomplishments and get ready for the new year. As you create your 2020 New Year’s financial resolutions, make a commitment that to the extent possible, you will save money to cover the costs of your goals.
How do you Maximize Your Savings?
Seal up the Leaks
The easiest way to maximize your savings on a low income is to look for the leaks. Leaks are the money wasters.
Level 1 leaks:
Bank account and ATM fees. What kind of fees is your bank charging? You might be able to find a better deal. Look around. And when you need cash, only use your bank’s ATM system. Withdrawing out of network means obnoxious fees that you cannot afford.
Cable/Satellite service. Today you have streaming options that are just as good as what you have with your cable or satellite service and much cheaper. With streaming, you get what you want and don’t pay for channels that you’ve never even watched.
Unused memberships. The new year is typically a time to get jazzed up about getting into shape. But the enthusiasm tends to wane after a couple of months. If you’re not using the gym, cancel your membership. You can use the outdoors and set up a small workout space in your home for much less money.
Leaky doors and windows. Whether you rent or own your place, simply going around and checking your windows and doors to make sure they are airtight will lower your monthly utility bills.
Level 2 leaks that prevent you from maximizing your savings:
Going to the grocery store when you’re hungry. Never do this. It is virtually impossible to fight the urge to buy everything you see. You can easily destroy your food budget and may even buy groceries that you throw away.
Coffee bar/café. A latte or your favorite drink now and then is okay, if you can afford it. But you will save money by purchasing a good coffee machine. Brew up your favorite drink every day at home and put the money into your savings accounts.
Shopping without planning and a list. Whether you are going to the grocery store or shopping center for other essentials, always plan in advance what you need. Inventory the home to be sure you don’t already have it. Make a list and budget and stick to it. Spontaneously stopping into any commercial establishment is a recipe for overspending and busting your budget.
Energy Drinks. A better and cheaper alternative is lemon water. Drinking lemon water first thing in the morning helps to cleanse your body of toxins. Your digestion is improved and your metabolism is accelerated. Energy drinks are expensive and may do more harm than good. If you feel tired all the time, it could be a sign that you are not getting enough sleep at night. Try to create a healthy nighttime routine so that you get the rest you need to power through the day.
Buying brand-name products. Brand-name is not necessarily better. Sometimes it could be. It depends on the product. Shop smart. Carefully examine the ingredients. Compare products and prices. You might find that there is virtually no difference between a brand-name product and a store product other than the price.
Maximizing your savings can be easy
These are easy ways to maximize your savings on a small income. They are essentially lifestyle changes. A little bit here and there adds up. At the end of the month, you will have money to fuel your savings goals. And you don’t need a big income to do it.
Be sure to sign up for our blog to get the latest tips on savings, budgeting, debt reduction, and credit repair.
Happy New Year!