Compared to elsewhere around the world, Americans and Canadians are terrible at putting money aside for a rainy day or retirement. The United States has a savings rate of 2.6 percent, while Canada’s rate of savings is 3.3 percent. Finance experts blame the economy for a paucity of savings, but consumer habits can also be attributed to the insufficient amount of savings.
The fact is, no matter how much income you earn, saving money for the short-, medium- and long-term can always be accomplished. The issue is that the average person doesn’t prioritize correctly and wastes their money on questionable items, such as the latest iPhone, a new television set or a luxury home that can fit the Romney family.
Economic Collapse News reported Thursday that due to the two percent payroll tax hike close to one-quarter (22 percent) of Americans will cut their savings or increase their debt, according to data published by the New York Federal Reserve. Instead of finding efficiencies in their household budgets, they’re slashing an important part of their future: savings.
If workers don’t start changing their habits soon then they’ll be in dire situations in their autumn or winter years. What’s worse is that the younger generations are not taught how to be fiscally prudent and decide to take on more debt than they can handle. Not saving is a lose-lose situation for all (even the overall national economy).
Indeed, even in this difficult economic time, one cannot fully blame those who live for today and forget about tomorrow. Why should one save money when they’ll get a fraction of interest in return and even lose the value of the money they put into their savings (inflation)? In a way, the Federal Reserve and the Bank of Canada are creating policies that deter saving money, though this is what grows an economy.
Anyway, whether you want to start saving for retirement, a big-ticket purchase, a getaway to Venice, a down payment on a home or just to grow your net worth, here are 25 ways to increase your savings to prepare should the economy completely collapse.
1. Pay yourself first: even if it’s five percent of your paycheck, putting aside a chunk of money during payday helps in the long-run. The rule of thumb among the financial community is to set aside 10 percent of your paycheck, but the larger the percentage the better.
2. Pocket change: finding money in your coat pocket or on the streets always makes the day better. Instead of spending this money towards a coffee try to put it in a jar and then cash it out at the end of the year to deposit the sum in your savings account.
3. Daily habits: some of us cannot function during an eight-hour day without sipping on a cup of java. But do you know how much that cup of coffee is costing you? Imagine if you quit spending $2 per day on coffee. That’s $10 per week, $40 per month and $480 per year.
4. Transportation: driving can be expensive, but so can public transportation. With fuel prices rising as well salaries for public employees (drivers, fare collectors, etc.), fares are going up. Instead of relying on a train or a vehicle, try considering walking or taking a bike. In this lovely weather, a nice walk in the morning or after work is fantastic and saves you money.
5. ATM fees: if you need cash always look for your financial institution. If not then be prepared to lose $1.50 on a transaction. All these kinds of ATM fees are unnecessary and can really hurt your finances, despite how small they may be.
6. Gambling: the odds of striking it rich by playing the lottery are rather low. Last year, Americans spent in total $65.5 billion on lottery tickets. Imagine how much they would have saved in a year instead of testing the odds. Avoid it and every time you consider spending $5, deposit it into your savings.
7. Thirsty & Peckish: in this weather, it’s no doubt we’re going to be thirstier and perhaps even hungrier. Instead of purchasing a bottle of water at your local convenience store or heading to McDonald’s, bring a water bottle with you and some snacks. This will save you a lot of money each week.
8. Entertainment: Americans are big on spending hefty sums of money on entertainment. Whether it’s purchases of a 60” television, an ultimate VIP cable package, a state-of-the-art smartphone package or heading out to movie theater each week, all of these are not needed and are rather costly. Other than taking back the television, consumers can reduce their cable packages, tone down the data plan and watch movies at home on the 60” television.
9. Credit Card: with all of the news reports about the astronomical debt levels, one would think that people would become more cautious about their credit card usage. It doesn’t seem so, especially during the holiday season. Instead of using a credit card to purchase food, buy gas or acquiring clothes, use cash or a debit card. This way, you’re shopping with your own money rather than your bank’s.
10. Forget wholesale: if you’re a family of one, two or three, buying wholesale and in bulk is a waste of money. The average Costco membership fee is $55 per year. It depends on how much you’ll spend, but judging that you are a single person in a small apartment, you most likely will not need a lot. Therefore, you are wasting $55 and some food items that may spoil.
11. Emergency account: maintaining an emergency savings account will save you money in the long-term. Instead of using a credit card, your long-term savings or a payday loan to cover an emergency, having a rainy day fund will prove beneficial over the next several months or even years (depending on how big the emergency is).
12. Grocery efficiencies: one excuse for not eating healthy is that it’s too expensive. However, grocery shoppers must ask themselves: how many bottles of coke, how many bags of potato chips and how many boxes of frosted flakes are in your cart? Again, it’s all about priorities and people can eat right by shopping wisely. This will save money in both the short- and long-term because the bill will be cheaper and your health care costs will be reduced.
13. Grocery efficiencies part II: here are other tips to save some dough: make a list, use a basket rather than a cart, stock up on sales of items you know you’ll use, buy generic brands instead of name brands and shop on the day the sale begins because some of the products could be gone.
14: Grocery efficiencies part III: reduce your consumption of meat. With chicken, beef, pork and veal prices soaring, dropping meat from your meal at least once or twice a week can save a lot of money. By making a vegetarian dinner, you’re improving your health and, depending on what veggies you use, you can still get your necessary protein (of course, you can also save an animal’s life).
15. Selling stuff: do you have stuff in your closet that you never use? Then think about selling stuff you hardly ever utilize. You can either hold a garage sale or sell items individually on Craigslist, Kijiji or eBay.
16. Give up vices: there are no benefits to smoking cigarettes, drinking alcohol or doing drugs. By eliminating these expensive habits that offer no benefits, you’ll save possibly thousands of dollars each year.
17. Five-dollar rule: if you took out $20 from the bank machine to purchase an item and after you bought the stuff did you get change back? If you got at least $5 back, deposit that money into your savings. You’ll realize that $5 here and there will add up at the end of the year.
18. Think before buying: when you notice something that you want to buy in a store, stand there for about a minute and think in your head if you really need it. Also, if you’re in the market to buy a $500 computer, wait 30 days to see if you actually want or need it – heck, you might even find the $500 computer for $299!
19. Simple activities: life is getting more and more expensive. Going to the local museum is expensive. Going to the movies is expensive. Going to a theme park is expensive. Instead of spending outlandish amounts of money to entertain the family, relish in simplicity, such as throwing a Frisbee, taking part in a long walk around the city or just sitting at a park and talking.
20. Dollar stores: these are safe havens for the frugal and for those who are looking to save money on the same products that are more expensive in other stores. For $20, one can get a whole quarter’s worth of items: shavers, soap, shampoo, body wash (or soap), toothpaste, ear cleaners and much, much more.
21: Razors (for men): speaking of razors, do you actually buy that $20 five-blade razor and the $10 shaving cream? Forget it and purchase a simple two-blade razor at the dollar store and use soap to shave.
22. Coupons: it’s not an antiquated practice to find coupons for items you usually buy. Using coupons, no matter how small, can save money on any kind of bill.
23. Gym memberships: it’s likely that you rarely go to the local gym. Therefore, you’re wasting at least $100 a year on this membership. If you want to be physically fit, buy some weights, go for long walks or jogs and even buy an exercise machine.
24. Bank accounts: if you have the top monthly plan at your financial institution, consider reducing it for a cheaper one, especially if you’re not using all of the so-called features that come with a VIP plan.
25. Debt: the most important way to save money is to get out of debt. Once you don’t owe anyone anything, everything you earn is for you and you only. This way, you can save more, have peace of mind and know the fact that you’re not a debt slave.