Savings: A Little Goes A Long Way

There’s a problem with the way Americans save their money: they just don’t! Six out of ten Americans don’t have enough cash set aside to cover a $500 emergency. That’s 195,431,507 people who are vulnerable to any financial disaster that comes their way.

If you count yourself among them, you know that disasters aren’t always the big things like unemployment or chronic illness. Something as simple as your water heater breaking down around the same time rent and your utility bills are due can throw you into a tailspin. You know from experience how awful it feels to prioritize bills and delay necessary repairs until you get paid.

Imagine how much less stressed you would be if you had the cash to cover everything all at once. The thing is, you’ll never plan for these emergencies without saving a little bit of money. Not sure where to start? Check out these simple yet effective ways to build your savings from scratch.

Track your spending

You won’t know what your savings potential is until you have a budget. Once you start tracking the cash coming in and out of your accounts, you’ll understand what you’re making compared to how much you’re spending. If you’re spending more than you’re making, you need to scale back on unnecessary purchases. Things like takeout, Starbucks, and Amazon Prime are common culprits that do nothing but waste your money.

Break your budget into the needs and the wants. The needs are what you have to pay, like rent, online cash loan payments, and utilities. The wants are everything else, like entertainment, clothing, and that extra gig of data on your phone. In other words, the wants consist of the stuff you don’t really need and can easily change to free up cash.

Take the time to identify which habits you’re willing to eliminate on your journey towards greater savings. There’s no right answer. If you can’t separate yourself from Starbucks, look to other areas of your budget to see what you can cut down.

Be a choosy borrower

A well-developed savings account isn’t the only way you can reach your goals or cover financial emergencies. Every day, Americans rely on mortgages to buy their dream houses, auto loans to get a new ride, and financial assistance to pay for college. These large, long-term loans are designed to help pay for life’s biggest purchases. Meanwhile, small, short-term loans are better equipped to help you cover less ambitious goals, like when you’re faced with an unexpected medical bill or a necessary car bill.

Knowing when and how to secure the right loan is an important step to financial security. When you want to tick a huge life goal off your list, speak with an advisor at a bank. They can help you navigate the red tape that’s between you and your first home, a brand-new car, or your education.

When you need a quick stopgap to cover a time-sensitive financial hiccough, speak with a direct lender like MoneyKey. They’ve simplified the borrowing experience, making it easier for their customers to get help. That’s because they do most of their business online. Direct lenders offer online payday loans so they can cut out much of the red tape that slows down the typical lending experience. Unlike conventional lenders, they process applications, issue loans, and accept payments over a secured network. It’s a way of democratizing financial assistance so that the unbanked or underbanked can get help.

Download an app

If you, like Chrissy Teigen, have room for Animal Crossings Pocket Camp on your phone, then you have room for a money management app, too. Financial apps are an easy and convenient way to keep tabs on your accounts. Some — like Mint or LevelMoney — simply track your spending and help generate budgets, while others make saving cash so easy you don’t even have to think about it.

Acorns makes saving easy by dealing with small pieces of change. By pairing it with your bank account, you give it permission to round up the cost of every purchase you make to the nearest dollar and invest the difference. For example, if you swipe your debit card at the gas station for $45.67, Acorns charges your account $46 and puts the extra $0.33 into its investment fund. On its own, a third of a dollar doesn’t amount to much, but it’s joined by the rounding of every purchase you make. Eventually, all those odds and ends add up!

Brown bag it

When you can’t spend another second in the recycled air of your office, your lunchtime trip to Chipotle becomes an important part of your day. It’s also an expensive one. Jillian Berman, the Associate Business Editor for The Huffington Post, calculated you could save as much as $2,500 by avoiding the burrito temptation and bringing lunch from home. If you aren’t much of a cook, check out these easy yet tasty lunch ideas.

Cultivate your cooking skills and branch out to other meals. Eating at home is almost always cheaper than dining out, especially when you shop for groceries wisely and take advantage of coupons. If you can’t cut out takeout cold turkey, don’t panic. Visit your favorite restaurant sparingly, and when you do, try out these money-saving tips.

Walk more

Kathleen Elkins, a money reporter for Business Insider, claims she saved $162 and burned 5,000 calories every month by walking to work. If you live in within a pedestrian-friendly, 3-mile radius of your work, consider walking or biking to your shift. You’ll save some money and improve your fitness at the same time. While you’re at it, limit how much you rely on cabs or Uber when it’s safe to do so.

Getting out in the fresh air each day is also a great way to improve your mood. Researchers at the Centre for Diet and Activity Research (CEDAR) found people feel better when they have a longer walk to work than those who drive. They attribute this boost to the fact the walkers have more control over their schedule, as they aren’t stuck trying to accommodate rush hour traffic.

The bottom line: the little things add up

Though on their own these tips may seem like they won’t amount to much, their power lies in their combined impact. Once you make enough small changes to your spending habits — changing the way you think about money in the process — you’ll start to see your savings grow. Get started using the tips listed here first, but don’t limit yourself. Brainstorm your own ideas and see how easy it can be to save some cash.