On December 31st, as you looked back at your holiday spending, were you one of the many people who resolved to save more in 2020? Two months into the year, how’s it going? If you’re still struggling to build your nest egg, we’ve got two “dos” and one “maybe” from personal finance experts to help jumpstart your saving habit.
DO: Cancel Recurring Credit Card Charges – Remember when you signed up for that premium streaming service to binge watch a show? You told yourself you’d cancel after the “free trial period”. Or maybe the subscription food delivery service turned out not to be the bargain you hoped for. Whatever the charge is, don’t keep paying it! It’s now easier than ever to cancel those charges. There are apps, like TrueBill and Trim, that will keep track of your recurring charges, and cancel the unwanted ones for you. Once you download the apps and connect your credit or debit card accounts the apps work in similar ways. According to the site Techlicious, “Trim uses text messages to alert you each month to recurring charges. Simply reply with “Cancel,” and the name of the subscription and Trim will take care of it — if they can. TrueBill works the same way except you use the TrueBill app instead of text messaging for subscription information and cancellations.” In the future, setting simple calendar reminders to cancel a recurring charge is an effective way to manage these drains on your bank account.
DO: Open a High-Yield Savings Account – One mistake savers make is not having a savings account that’s not attached to their regular bank account. A high-yield account pays more interest than a standard account. Next, any extra money that you get through the year, deposit into the high-yield account. Did great Aunt Edith send you $100 for your birthday? Did the boss give you a $1000 bonus? When your buddy finally pay you back that $50 he borrowed, deposit it in your high-yield account. You’ll be surprised at how quickly it adds up, and you won’t miss it this “extra” money. NerdWallet offers a list of the best savings accounts with the best rates to help you find the one that’s right for you.
Don’t Bank on a Large Tax Refund…or Maybe Do? – Many of us have heard that we shouldn’t hope for a large income tax refund. Tax experts will tell you that you’ve essentially been giving the government a year-long interest free loan. Instead of getting a refund that money could have been added to your paychecks all year. (And you could have been putting that cash in the high-yield savings account you should have opened!) But, personal finance expert Michelle Singletary points out that there are some people who are an exception to this rule of thumb: those for whom saving doesn’t come naturally. She writes, “If you are a natural-born saver, it seems ridiculous that others can’t be disciplined enough to save throughout the year. Yet (as Shakespeare says): ‘This above all: to thine own self be true.’ If this is the only way you can save, do what you have to do.” In other words, if you know you won’t save extra money that comes in each paycheck, but you’ll save a tax refund, then aim for a big check from the IRS. Just be sure to save it.
Saving money in your personal life might be difficult, but we here at VersaTel Solutions can help your small business save money. Reach out to us, and we’ll tell you how.