If you've yet to save your first $1,000, take comfort in the fact that you're in good company. An estimated 69% of Americans have less than $1,000 in a savings account, and 34% have absolutely no savings at all. Whether your lack of savings stems from too many bills or not enough self control, here are five tips to help you finally hit that goal.
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1. Create a budget
You might think you have a decent handle on your finances, but without a budget, you'll have a much harder time tracking your spending and finding room to save. It's estimated that only 41% of Americans follow a household budget, so if you're not one of them, it's time to bust out that spreadsheet and get to work. First, start by listing your different spending categories and figuring out how much you spend on each. Next, add up your one-time annual expenses (like warehouse club renewals or roadside assistance membership) and divide that total into 12 so that you're putting money aside each month. From there, you'll be able to see which spending categories offer an opportunity for savings and which are simply non-negotiable (think rent, your car payment, and health insurance premiums).
2. Make small changes
Once you have that budget in place, take a look at your negotiable spending categories, like leisure and dining out, and commit to reducing them. Cutting out your daily latte won't make you rich, but it can help you accumulate $1,000 a lot faster. The same holds true for brown-bagging your lunch, renting a movie and skipping the theater, or eliminating one restaurant meal per month. This isn't to say that you should never indulge in the little things that make you happy, but rather that you should cut back enough to slowly but surely reach your $1,000 goal. As an example, Americans spend an average of $10 each time they go out to lunch. If you pack your own lunch three times a week, spending about $4 instead of $10, then you'll save $70 a month with that one change alone.
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3. Sell things you don't need
That unworn clothing stuffed in the back of your closet doesn't need to sit there taking up space. The same goes for old furniture and unused electronics. If you're willing to put in a little time, you can list your unwanted goods online and take in a little extra cash while freeing up valuable space in your home. Craigslist is a good place to start if you're new to this particular game, as it's one of the few sites that doesn't charge for a listing or take a cut of your proceeds. You might also try posting your wares on your social media platform, asking friends to share, and seeing if anyone bites.
Not sure how much to charge for your old stuff? Trying searching for similar items online to get a comparison point, and price your items based on their age and condition. eBay is a great place to look for used items and get an idea of their value, whether or not you end up selling your own items on the online marketplace.
4. Work a side job
Many of us work hard enough that the idea of a second job seems largely unappealing. But if there's really no wiggle room in your budget, then you may need to generate more income in order to save some money. The good news, however, is that you don't have to get extreme. Working two weekends a month, or a few nights a week, could be enough to help you reach your $1,000 goal. Retailers, for example, often need extra hands on deck during the holidays, while certain hotels and restaurants need additional help during the summer months. If you're willing to do the work, it pays to inquire locally to see what opportunities might be available.
If you have a talent that you can convert into cash -- whether it's writing, creating works of art, or navigating complex computer issues -- even better. Sites like Upwork and Freelancerare a good place to start if you're not sure how to market your skills.
5. Make it automatic
Some people just aren't good savers by nature. If you're committed to socking away $1,000 this year, then be honest about your habits and overcome them by setting up an automatic savings plan. All you need to do is arrange to have a portion of each paycheck directed into a savings account, and you'll eliminate the temptation -- and opportunity -- to spend that cash in the first place. Generally speaking, you should aim to save at least 10% of each paycheck, but if circumstances don't allow for that right now (say, you're working to pay off high-interest debt), then aim to set aside $84 a month, which should take you to your $1,000 goal in a year's time.
While saving $1,000 is a great start, it's unfortunately not enough for most people. Ideally, we should all have emergency savings that cover three to six months' worth of living expenses, so once you hit that $1,000 mark, don't stop there. Rather, keep using these tips to continue your savings efforts. The more money you manage to put away, the more financially secure you'll be at any stage of life.
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