5 Money Saving Challenges for Your 2020
Every year the cost of living goes up and it gets more and more difficult to set money aside for your goals and for unexpected expenses. According to a study in 2019, approximately 21% of Americans don’t save any money for retirement or emergencies at all. Whether you find yourself constantly overspending or you’re looking for a new way to save more money, these tips could be helpful:
Save automatically through a direct deposit from your paycheck. When you don’t see the money, you are less likely to use it. For example, you can make it harder for yourself to use money saved automatically by opening a savings account with a credit union as they typically have fewer branches than banks and thus less accessible.
Save Your Tax Refunds
A lot of people who expect to receive a tax refund, already have some spending plans tied to the expected refund (shopping, traveling, new car, etc..). Unless those expenses are a necessity or would make your financial life better (such as paying down debt or using it for a downpayment towards a house), challenge yourself this year to save the entire tax refund check or at least a substantial portion of it into your savings account; especially if you do not have emergency money set aside. The same thing goes for any windfall of money such as annual work bonus.
The 52-week saving challenge
This saving challenge is relatively simple and can help you toward setting an emergency fund. You start at the beginning of the year by saving $1 in the first week, $2 in the second, $3 in the third and so on. For all 52 weeks in the year, you would save about $1,378, which is pretty good considering that you are only saving an additional $1 every passing week of the year.
The keep-the-change challenge
You can keep all the spare change you get from every purchase. A lot of banks offer this feature (or similar tools) for free . If you purchase an item with your bank card that costs $2.50, you’d put $0.50 in savings. This is the same idea as saving all your coins in a jar if you spend in cash. There are also some apps that do this automatically for you (for a fee) but using free features from your bank would probably be best if you are trying to save money, but you can decide the best option for yourself.
Pay off credit cards in full each month
I’ve met a lot of people who are struggling with credit card debts (I will write more blogs on tackling credit card debt later). Here is what I would recommend as a challenge for 2020 to help you manage or avoid credit card debt: Pay every dollar you charge on credit cards in full by the due date. If you have one of those “no interests for 6, 12, 24 months” credit card, to avoid any interest rate charges you would need to ensure that: (1) you are paying at least the minimum monthly payments and (2) you pay off the entire balance by the deadline given. Remember that every time you are paying interests, late fees, etc… it only sets you back financially, no matter how well you are doing on your saving plan.
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