A recession isn’t the time to make major money moves, but it is the time to make smart ones. If you were around for the Great Recession of 2007-09, you know it became more important than ever to save payment. Unfortunately, a lot of the usual ways to save money may not add up to enough. Or because of COVID-19, they may just not be advisable. (Think carpooling, or switching to public transit.)
Now is the time to think outside of the safety deposit box. Our current economic situation was caused by some unusual events, so it’s the perfect time to save in unusual ways. This article will share some approaches to squirreling funds away that you may not have tried before.
Spend and Save Payment Simultaneously
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Putting money into savings while you’re spending sounds too good to be true. However, you’ve likely experienced the concept when shopping around the holidays. As you check out, you’re asked if you want to round up to the nearest dollar to donate to charity. With what’s called round-up savings, that’s what you’re doing — except the rounded amount goes back to you.
More and more banks are introducing this option to their customers, although it’s still pretty new for them. You’re likely to have better luck finding an online debit card with the feature. While it’s convenient, round-up saving won’t net you a lot all at once. However, you’ll be pleasantly surprised by how much you save over time.
Keep Your Cash
If you’re looking for slightly more immediate savings results, take stock of all the cash in your house. Odds are, you have more than you realized. Check couch cushions, clothes pockets, and car cup holders for any money that may be hiding in plain sight. Another good place to look is in greeting cards you receive for the holidays or your birthday. People often leave cash gifts in cards for safekeeping, then forget it’s there.
Once you’ve gathered all the cash in your house, put it together somewhere you won’t spend it. The pandemic has made this easier, as some businesses are not currently accepting cash payments. This doesn’t have to be a stagnant savings pool, either. Anytime you find yourself with cash, add it to the collection. Having a rainy-day fund that you can easily access can help relieve a lot of financial stress.
Save Unexpected Income
Cash around the house is not the only form of surprise money you can convert into savings. If you find yourself receiving unexpected income or a financial gift, resist the urge to spend it. You can use that money to start or supplement your savings account. This method of saving does require some willpower, so it won’t be right for everybody.
If it sounds too difficult never to spend an unexpected windfall, try a compromise. Set a percentage to use and a percentage to keep. This method is ideal for anyone on a tight budget. Because you’re saving money you hadn’t already planned on spending, you’ll automatically come out ahead.
Make Payment to Yourself
Not dipping into money you have allocated for something else is the ideal way to save. For anyone making monthly payments toward a debt, this is especially true. If you are making final payments on something, go ahead and keep paying that amount — with one important change. Once you’ve paid off the loan, make your regular monthly payment to yourself.
The idea is that you’re already used to going without that monthly figure. So keep going without it and put it in your savings account. You’ll be able to save significant amounts over time without changing your spending habits.
Learn Stores’ Sales Cycles
Changing how you spend your money can be challenging. Changing when you spend your money is much easier. Every store has a sales cycle. By learning when things go on sale at places you frequent, you can reduce how much you spend. You’ll still be purchasing the same items, just on a different day at a lower cost.
Pay attention to when places like your grocery store send out their weekly coupons. If your regular store has an app with digital coupons, learn when those are updated. Usually, it’s midweek, but it can vary by location. Even without added coupons, shopping in line with your favorite stores’ sales cycles should make a pretty big difference on Payment.
Drop Expensive Habits
Financial changes often go hand in hand with other life changes. If you’re hanging on to some bad habits, this is a great time to drop them. Depending on what they are, pursuing them could be costing you significantly. Consider the cost of a pack of cigarettes, a bottle of liquor, or a six pack of soda. By reducing or eliminating your consumption, you could end up saving a lot throughout the year.
Maybe it’s a different kind of habit you want to drop. While tempting in our stressful world, retail therapy is not the wisest activity in a recession. So do your best to kick the spending habit and put your funds in savings instead. Or maybe you chronically pay your bills late. Not only can that negatively impact your credit score, but it can also cost you in fees. Whatever change you’d like to make, commit to it this year, and see a host of benefits.
Develop a Green Thumb for Payment
There are methods of saving that don’t require juggling accounts or pinching pennies. One great way is planting a garden. While winter isn’t the ideal time for this, you can still get started.
Plant an indoor herb garden instead of purchasing pricey fresh herbs at the store. Grow your own aloe vera to use for basic first aid needs. A lavender plant in your bedroom can reduce stress and encourage sleep just as well as expensive essential oils. When seasonally appropriate, start a plot of vegetables. You’ll get to enjoy fresh produce and the satisfaction of saving your money.
It isn’t possible to know precisely when the current state of the economy will improve. We’re also unsure whether it will get worse before it gets better. To prepare for the days to come, don’t be afraid to try a new way of saving. If it sets you up for a better financial future, it’s worth doing.