good saving tips from CNBC
- Automate everything
If you want to save more money, start by getting out of your own way: Automate the process. Set up your savings accounts, retirement funds and debt-repayment plans to draw money from your paycheck or checking account each month so that you never have to make the choice to spend or save those dollars.
As self-made millionaire David Bach writes in “The Automatic Millionaire, ” automating your finances is “the one step that virtually guarantees that you won’t fail financially. … You’ll never be tempted to skimp on savings because you won’t even see the money going directly from your paycheck to your savings accounts.”
It can also be a smart way to get a headstart on a financial goal, such as building up your emergency fund.
- Think about purchases in terms of units of time
Don’t underestimate the difference a mindset shift can make. For J.P. Livingston, who retired at 28 with $2.25 million in the bank, the trick is to think of your purchases in terms of units of time rather than dollar amounts.
“Instead of saying a new unlocked iPhone costs $800, you might do the math to figure out it would cost you 60 hours of work, or a week and a half of your life,” she tells CNBC Make It. It’s a concept she first learned about in Vicki Robin and Joe Dominguez’s “Your Money or Your Life. ”
- Don’t sweat the small stuff
Worrying about the cost of every cup of coffee or takeout meal can be tedious and doesn’t always lead to a big payoff. To save a larger chunk at once, try focusing on the three major expenses Americans spend 70 percent of their average budget on: housing, transportation and food.
“If you can limit those expenses, that’s where your big time savings will come,” Sean, a millennial with $250,000 in the bank, tells CNBC Make It.
- Pay your mortgage more often
Switching to a bi-weekly payment plan is a painless way to save tens of thousands of dollars over the course of your mortgage, says David Bach, co-founder of AE Wealth Management. - Swap out your car for a bike
No matter where you live, biking to work instead of driving or taking public transit will save you hundreds or thousands of dollars every year.
