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Money-saving ideas: Five easy, painless ways to plan for the future

By Connor Freitas

If there was a shiny red button in your house, and pressing it automatically placed $20 into your savings account, would you use it? The answer is probably yes. So why can’t all money-saving ideas be this simple?

Money-saving ideas: Five easy, painless ways to plan for the future

Saving money, and the art of being disciplined enough to do so, are challenges that have been faced for centuries. According torecent research from Bankrate, the typical American household has $8,863 tucked away in liquid savings – meaning they can easily access the funds in case of an emergency. But more than one in five of those polled said they had no savings whatsoever. Generally, consumers are recommended to have six months’ worth of expenses set aside so they are protected against unexpected events such as losing their jobs.

Bankrate estimated that, in 2017, the typical person was spending about $5,000 a month, meaning they should have $30,000 in their savings. This means there’s a gap of about $21,000. On top of all this, debt has been steadily rising and, according to the US Federal Reserve, the average American adult with a credit card owes $5,673.

All of this points to an urgent need to save more cash. But what are the most effective ways to save money? In this article, we’re going to give some top money-saving ideas and tips on how to ensure the money stays untouched.

Tips to start saving money

1. Pay yourself first

Most of us are nice and prompt when we’re paying our rent, mortgage or utility bills – so why not incorporate saving into your monthly outgoings? By keeping meticulous records of how much you spend – including the excesses that can be cut and the treats you want to keep – you should be able to work out a surplus that can be comfortably taken from your paycheck as soon as it lands in your account. It’s easy to establish a standing order so this happens automatically on payday, meaning you won’t miss it. A top tip is to ensure that you are realistic about how much you’re saving, as there’s nothing more demoralising than having to raid your rainy-day fund because you overreached.

2. Get clever

There are plenty of apps, mainly targeted towards millennials, that are helping us learn how to save money. Some are directly connected to your bank account and round up your purchases to the nearest dollar. Let’s imagine that you’ve spent $1.80 on your morning coffee. A total of $2 would be taken from your account, with $0.20 of this saved in a dedicated pot.

Although this may seem like a trivial amount, it soon adds up. According to Moneybox, a provider in the UK, its users save an average of 28p (35 cents) per transaction, and make an average of 30 transactions per week. That’s £8.40 ($10.50) a week, £36.50 ($45.50) a month, and £438 ($546) a year. When coupled with the ability to place these funds into a high-interest account, add weekly deposits and “supercharge” the amount of money saved with each round-up, there are opportunities to save substantial sums in a relatively painless way.

3. Seize opportunities

With populations now living for longer, governments around the world are beginning to introduce different ways to save money that are designed to encourage workers to contribute towards their pension. This can include automatic enrolment into pension schemes. Some employees are also lucky enough to work for companies that will match any contributions made, which helps their money go further. It’s always worth exploring the potential benefits associated with boosting the amount you’re saving into a pension – especially considering you might benefit from tax relief.

4. Be a smarter shopper

Some consumers complain that the most common money-saving ideas mean that they have to go without, but with careful planning this doesn’t have to be the case. Discount retailers often sell compelling alternatives to the branded household groceries we all know and love – and there are substantial savings to be made. Searching online for coupons and vouchers and becoming a member of cashback schemes can help you save a tidy sum by the end of the year. This could be put towards a holiday, a new car, paying down credit card debt or stowed away in a savings account. The choice is yours.

5. Make your money work for you

Effective ways to save money only work if you do your research and get the best interest rates possible. Price comparison sites mean that it’s never been easier. Generally, the best deals are associated with accounts where your funds cannot be accessed for several years without incurring a substantial withdrawal fee. Because of this, such an arrangement is best suited for those who are saving with a long-term goal in mind. If you’re disappointed with the returns on offer, you might want to consider stocks and shares – and index funds are an easy way of investing in a diversified set of assets managed by financial experts. However, this method carries substantially more risk than a normal savings account, meaning you could end up losing money.

Tokenised securities are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how tokenised securities and leverage work and whether you can afford to take the high risk of losing your money. Nothing in the above article should be regarded as a recommendation to trade generally, to trade on a particular platform or to trade in a particular asset. Asset prices can go down as well as up and past performance is not a guide to future performance. Investors and traders should thoroughly research an asset or strategy before making any trading or investment decision and if necessary seek professional advice.

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