Let’s face it: we’re all trying to save a buck.
In fact, the Average American has some sort of money-saving on their annual list of resolutions or goals. It’s also more of a necessity than ever, as more families are living paycheck-to-paycheck than ever before in the U.S., with an average of only about $500 in savings but $16,000 in debt per household.
But looking at the typical household budget and expenditures, financial analysts recognize that the average family can save at least $5,000 dollars this year just by better money management and simple savings strategies.
If you’re keeping score at home, that breaks down to about $416 in savings each and every month!
What could you do with $400 extra every month over the course of just one year? How about building an emergency fund, padding your savings, starting to pay off debt, buying a home instead of renting, improving your credit score, and putting your family on a MUCH better financial path, for starters?
And while we can’t simply give you a big raise at work to solve your money woes (although we think you deserve it!), we can offer up these 10 cash-saving hacks that will really help your bottom line this year and far beyond.
Today, we’ll cover the first 5 ways to save $5,00 this year and we’ll revisit the next 5 next week – so stay tuned!
- Buy your own home.
We get it – buying a home is expensive, especially with the real estate prices these days and the cost of property taxes, maintenance, etc. for homeowners. But if you break down the numbers, the alternative of renting is far more expensive in the long run. In fact, the average net worth of homeowners is about $235,000 compared to a measly $5,000 for renters. Homeowners also gain the advantage of paying down their mortgage, tax breaks, and buffering against further price increases and inflation, which is often overlooked. The bottom line? Buy a home if you want to be in a MUCH better financial position.
- Avoid bank fees.
Did you know that banks made more than $33 billion last year just in fees? It’s true, as the average customer pays $412 each year in overdraft fees as well as $329 in late fees. If you want to avoid losing about $700+ next year for absolutely no good reason, make sure your bank has overdraft protection, a savings account to backup your checking, and you can take out cash
- Stop paying late!
If you want to start saving money immediately, it’s time to manage your finances better, especially when it comes to paying on time. In fact, 1 in 4 U.S. adults still DON’T pay all of their bills on time, and only about 50% of Millennials do so! But when we pay our phone bills, credit cards, utilities, and other loans after the due date, we incur some big fees – about $250 and up per year for the average person! Set your payments on auto, set calendar reminders, and call or log in to confirm they’ve posted.
- Slow down our use of debt – and start paying it off.
U.S. consumers now have more than 1 trillion in revolving debt, which includes credit cards and other revolving debt. Add in a record level of student loans, an explosion of financing for new cars, unprecedented medical debt, and all of our mortgages (which is “good” debt) and we’re faced with a $12.9 trillion tab at any given time – and the monthly interest payments to show for it.
In fact, the average U.S. household with credit cards holds 8 of them, with $16,000 worth of debt and minimum payments of $430 every month. Not only are we wasting an incredible amount of money paying interest over time, but those credit cards are about to get a whole more expensive in 2019 as rates go up. So, do yourself a favor and save a whole lot of money this year by paying down – or off – your credit cards.
- Check your credit report regularly.
This may not be the first thing that comes to mind when we mention saving money, but keeping tabs on your credit pays big dividends these days. However, the opposite is often true, as only 1 in 4 people check their credit report at least once per year, and about six out of ten Americans couldn’t even tell you what their credit score is right now.
Why is this so crucial for saving money? Unfortunately, we live in the age of data breaches, financial hacks, and identity theft. This year, about 1 in 4 of us will be the victim of one of those, and it often takes years and several thousands of dollars to clean up the mess if your identity is stolen or your financial information hacked or stolen. You’ll save a lot of money by preventing that from happening with credit monitoring and something as simple as checking your credit periodically.
Look for the next 5 ways to save $5,000 this year coming soon!