Learning how to save is easy in theory but complicated in practice. While this is particularly true if you’re working with a limited budget, that doesn’t mean it’s impossible.
There are some surefire strategies you can use to build a saving habit. Here’s how to set goals, automate your savings, and find extra room in your budget even when money’s tight.
If you have limited disposable income, it can be challenging to set a savings goal. After all, what good is a goal if you don’t have money to put towards it?
Fortunately, your savings goal doesn’t have to be massive. For example, while building an emergency fund for three to six months of expenses is wise, it’s okay to start with a more realistic number.
A good place to start is a $1,000 emergency fund. If you can handle a $1,000 emergency expense, you’ll be on better footing than 57% of Americans.
One thousand dollars might sound like a lot of money, but if you split it up over a longer period of time, it won’t be as hard. When you break up $1,000 over a year, it’s only about $84 per month or roughly $20 per week.
If that feels like a big lift, don’t worry. There are ways to add extra savings to your bank account. Even starting with $5 per pay period can put you on the right path.
It’s hard to convince yourself to set aside money when your cash flow is tight. Get into the habit without thinking about it by setting up automated transfers to deposit from your checking account to your savings.
You can use the Payactiv Visa® Card’s* Goal-Based Saving1 feature. This will ensure you avoid accidentally incurring any overdraft fees when you set up the automated transfers.
Catching up can be tricky when you fall behind on your monthly bills. While you wait for your paycheck, you also rack up late fees that put you further behind.
Luckily, there’s a simple solution for this. Payactiv, sponsored by your employer, gives you access to your earned wages when you need them. The amount you withdraw before payday gets deducted from your next paycheck with zero interest or late fees. This way, you can pay your bills on time.
Let’s say that saves you from a $7 late fee on your electric bill. If you transfer the $7 that you saved to your savings account or set up a $7 per month transfer to automatically go from checking to savings, that brings your monthly savings goal of $84 to $77.
One big way you can save a meaningful amount of money is by negotiating the bills you pay every month.
A chat with the cable company could save you $20 to $30 per month, depending on your package. Asking your car insurance agent about discounts might save you on auto premiums.
If you set up automatic transfers to deposit the difference into your savings account, these monthly bill reductions could knock another $35 off your monthly savings goal. Then, you only need $42 more.
We’ve all been there. You pick up an extra item at the grocery store or put another item in your Amazon cart, only to think better of the purchase. It’s not something you really need, so you don’t spend the extra cash on it.
When you find yourself in a moment of self-discipline, open your Payactiv app and transfer the amount you didn’t spend directly into your saving goal. This way, you reward yourself for your positive behavior by moving closer to your financial goals.
Let’s say you do this with a $20 item once per month. This means your total monthly saving goal is now down to $22. You’re getting close!
Inside the Payactiv app, you can split your saving goals into different buckets. Each bucket has a progress bar you can view.
Visualizing your progress can keep you motivated throughout the year as you get closer to achieving your financial objectives. It can also help you realign your spending if you veer off course in any given month.
Ultimately, it’s possible to build savings with a limited budget. It just requires a little negotiation, automation, and creativity.
Download the Payactiv app to start working towards your saving goals today!
1Goal-based saving is a set-aside account, and you will not receive interest or other earnings on the funds within the goal-based account.
*Central Bank of Kansas City does not administer, nor is liable for earned wage access. The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll free at 1 (877) 747-5862, 24 hours a day, 7 days a week.
All content provided on Payactiv.com/financial-learning/ is for informational purposes only. Payactiv makes no representations as to the accuracy or completeness of any information on this site or found by following any link from this site. Payactiv will not be liable for any errors or omissions in this information nor for the availability of this information. Payactiv will not be liable for any losses, injuries, or damages from the display or use of this information.
* The Payactiv Visa Prepaid Card is issued by Central Bank of Kansas City, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Certain fees, terms, and conditions are associated with the approval, maintenance, and use of the Card. You should consult your Cardholder Agreement and the Fee Schedule at payactiv.com/card411. If you have questions regarding the Card or such fees, terms, and conditions, you can contact us toll-free at 877-747-5862, 24 hours a day, 7 days a week.
** Central Bank of Kansas City is the issuer of the Payactiv Visa Prepaid Card only and does not administer, endorse, nor is liable for the Payctiv App.
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