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Amy Nickson On 6th Apr,16
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money-saving-ideas

Who said, you must eat out at a lavish restaurant 3 times a week, or watch back-to-back movies in multiplex with boxes full of costly popcorn? Those things aren’t mandatory for indulging yourself, these are actually the outcome of lifestyle inflation that you’re following like a puppet.

Do you remember those good old days? Jumping on the pile of fallen leaves, cycling, or just walking on the river or beach side? I know those golden days are gone and replaced with busy nine to five work life. And you’re trying to ease your stressful life by wasting your hard earned money.

But, in reality, you’re just taking a plunge in a costly oasis where spending millions of dollars can’t buy the true happiness. Rather, I think going to a park, fishing, spending a beachside evening, and participating in camping program in the nearest place are more precious and relaxing than clubbing, shopping, and costly drink.

Creditdonky.com recently revealed that many Americans are struggling to create a strong emergency fund as well as to secure their retirement age.

Saving behavior in the US

What do you think about saving money? Do you think saving money is a difficult task? These are the questions that came to my mind after going through some stats that have been uncovered recently. Here it is:

Zero savings Adults who have no bank accounts Adults living paycheck to paycheck Less than $100 savings for emergency Less than $500 savings for emergency 3 months' worth of expenses 6 months' worth of expenses No retirement saving
26% 7.7% 38 million households 45.6%.
Women-22.9%
Men-22.7%
41% 17% 23% 36%

The above table pushes us to think about the personal saving rate in the United States is declining with time.

According to a recent survey (January 2014 to January 2016), the saving rate was 4.4% at the end of 2014. But, in 20014, the savings rate was 10.5%, that means the savings rate is already declined.

Resource: statista.com

Retirement savings behavior in the US

The table is already showing that 36% of seniors aged between 50-64 have no retirement savings. However, as per the stats, the average 401(k) balance was good in the year 2013. According to the financial advisors, retirement savings are based on the people’s income and expenses. They should be more focused on their retirement savings from the very initial time of their earnings. Most of the middle-class workers want to save $250,000. But, most of the times they fail. The stats revealed that workers aged 30-49 are saving nearly $200 in every month. But, the same workers are saving only $78 at the age of 50-59.

Americans are accepting that saving money is not a cakewalk

In 2011, 2% of American seniors said that they have the plan to work forever. Unfortunately, the figure is now 7% and more who’re on the same boat.

Senior person's fear about the uncertain retirement days

59% of elderly person have accepted that they're worried about the retirement, which can create financial havoc for them.

People's approach to 401(K)

93% of workers contributing to a 401(K), but 67% of them are saving to qualify for their company match.

What are the reasons behind declining savings rate in the US?

Research claimed that,

Minority people are unable to save money

Nearly, two-third of the minority have no retirement savings. 75% of Latino and African American households have poor savings for retirement (less than $10,000).

High student loan debt and stagnant wages

Adults aged 35 and below are ranking negatively 2% on their personal savings rate.

Some cities are next to impossible for saving

Some cities are good for saving money due to the higher wages and lower living cost. Whereas some cities play a negative role in terms of saving money.

EXAMPLES

Best city for saving money Worst city for saving money
Baltimore- In 2014, this city ranked top of the list.
Median household income- $73,816.
Median household Expense-$49,566.
Phoenix- The median expenses are $1,136 higher than the median annual income.

Is there any hope for future savings in the US?

Again research showed that baby boomers are doing good in terms of saving money. An elderly person aged 55 and above has a positive personal savings rate (13%). So, if the elderly person can do it, then why not rest of the Millennials and young adults?

Indeed saving money is tough, but not impossible. The point that every American should have in mind is that they have to secure their retirement. Yes, once you take this oath, then you'll surely make it happen no matter how many students loan debt you have or other many obstacles. Try to save money according to your income and lifestyle and don’t forget to follow each saving tips that are helpful for your venture.

Throwback saving tips for them who’ve lost themselves in lifestyle inflation

Here are some saving tips that you have read many times but hardly follow. Take a close look at them and go ahead to secure your financial future:

1. Implement envelope budgeting and start following

Most of the financial bloggers advise people to follow a budget. But, it has been seen that budgeting sounds a boring topic for most of us, and following that budgeting is another uninteresting subject. But, the fact is there is no substitute to budgeting and, therefore, you must adopt this habit. I have gone through many budgeting related forums and observed that some people tend to discontinue their budget due to lack of time. Then again, some people fail to follow a strict financial life. They can’t curb their lavish lifestyle. So, I think instead of following a paper-pen budget, you can try the envelope budgeting system. It is very easy to understand and follow. You just need to divide the money into categories like groceries, entertainment, fuel, rent, etc. Just pull the money from the envelopes as per the requirement. I know it's easy to describe, but it's not that easy to follow. But you can get used to it after the first 2 to 3 months. Following a budget will help you to save money for sure.

Don’t miss out: How to Start an Envelope System and Budget With Cash

2. Stop wasting money on food

Wasting money on food! This might sound ridiculous, but it actually happens in the majority of the households. You just love to fill your cart while dwelling in the grocery store as this place is the world’s best place for passing out some casual time. If you really want to save money, then from now onwards you shouldn’t do that. What you need to do is set a period of time when you're not going to spend money on food. For instance, you must check in your cabinets, fridge and freezer to find what you already have! You must finish those ingredients first before your next visit to the grocery shop. You must do it from time to time for clearing out the leftovers from your pantry and freezer. You would be amazed next time how much money you can save by doing this. If you can’t plan your meal effectively according to the needs of your family members, then take help of meal planning apps like MealPlan, AnyList, Pepperplate, Mealboard, and so on.

Read more: Nutrition made budget-friendly: Healthy food that appreciates wealth

3. Become a wiser shopper

There is nothing as great as becoming a wiser shopper. But shopping unwanted items at a discount aren’t called wise shopping. Make sure the items you're buying are necessary, and you’re not breaking your budget for buying discounted items. You just need to track where to get clearance items, rummage sales and grab the deals when required. The consignment store is another best option that you can consider for buying household items. I’m not saying couponing is not effective but to get best of it, you must be an organized couponer. Also, you can download apps in your smartphone to compare prices and deals. Remember, getting deals is not a smart work. Getting useful items on deals makes sense.

Check out - Cure impulsive shopping: The best you can do for your loved ones

4. Bring your own food and water to work

Bringing own food and water are always appreciable, no matter how much tease you get from your co-workers. A brown-bagging habit, not only helps in saving money but also it improves your health. However, it's the truth that the cost of buying lunch seems to be sky high these days. So, you must use the leftovers from dinner, fresh salads, or sandwiches to your work to ditch your restaurant bills. You must carry a bottle of water whenever you go out to save on costly drink as well.

5. Automate your personal finances

This is one of the best ways to save money. But, we hardly follow it. As per Kendal Perez, spokeswoman for CouponSherpa, “create an automatic transfer between checking and savings, either once per month or when those paychecks drop.” Automate your savings now and stop worrying about financial future.

6. Take help of price-comparison apps

Before buying don’t forget to compare the prices of the things. By comparing the prices, you can actually save both - your precious dollars and time. To make your task easier, you can take the help of price-comparison apps such as ShopSavvy, BuyVia, Purchx, ScanLife, and much more.

7. Use browser extensions

Apart from apps, browser extensions can also help you save money while you shop online. It does its work quietly and comes to the forefront only if it has something effective to share such as a better price.

8. Trim your bills

Are your phone and cable bills bothering you? Don’t worry! Have a talk with your service providers and choose a cheaper phone plan and cable package that suits your needs better. Wipe out the items that you don’t need. For instance, if you’ve no interest in sports, then consider eliminating the sports channel. Why would you pay extra for it? To cut your energy bills short, get a programmable thermostat, use energy efficient appliances and switch off electrical appliances when not in use.

9. Save on your housing cost

If your housing cost is taking a huge chunk of your paycheck, then take steps to reduce it. Take a look at these:

  • Refinance your mortgage at a lower rate
  • Get a roommate if you are single
  • Move to a smaller place in a lower-cost area
  • Move to the suburbs
  • Revise your property taxes and homeowners insurance

10. Buy used stuff

You can get unbelievable discounts if you buy used items. You can grab used stuff at garage sales at best prices. Search the Internet to find out the websites that sell used goods. Also, keep a note of the valuable goods that people are giving away. Switch to second-hand items and save your precious dollars.

11. Improve your credit score

First, know your FICO score and then take steps to improve it. A good credit score can save your hard earned dollars in interest starting from home loans to student loans. Remember, “a penny saved is a penny earned.” So, save as much money as you can.

12. Use cash and bid adieu to the plastics

Purchasing everything with a credit card will ultimately harm your finances. If you can’t pay the balance on time, then you’ll find yourself trapped in debt. According to financial experts, when we buy with cash, we tend to spend less. So, it’s advised that you must stay away from credit cards and use cash for buying things.

13. Keep track of your budget

Revise your budget at regular intervals and find out the loopholes in it. Who knows you might detect the mistake that is draining your finances? You can take help of budget planning apps such as Mint, PocketGuard, GoodBudget, Mvelopes, HomeBudget, Wally, and so on to plan your budget efficiently. Changing your budget according to your financial needs can save your precious dollars as well.

Final thoughts

Each and every person has a special quality in them. But they hardly care or nourish that quality to bloom. If you’re a creative one, then think about what are the things you can do-it-yourself at home. There are many things that you can make easily on your own. I'm not telling you to do that or do this. Just if you think you can nourish your inner quality, then you must go ahead. The Internet is so close to you, then it just needs some click for getting ample of ideas. So what’s more? There are many ways that are already known like living a frugal life, negotiating prices, using a reward credit card, switching the car, getting Netflix, using cloth napkins, implementing a thermostat, buying farmer's product to ditch toxic items and so on. You’re already aware of these tips and also that I’ve discussed above. But make sure you’re following to get some positive changes in your wallet in coming days. Good luck!

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