The beginning of the year is a great time to evaluate your budget. We’re all focused on our income streams and money that flows into our accounts, but equally important is the money that leaves our accounts. We’re always looking for ways to save money. But what about those outside of the box ways to save?
Cancel Your Subscriptions
We’re living in an app-based world, which also means we’re living in a subscription service world. It’s easy to forget about subscriptions we signed up for throughout the year. We must be mindful of automatic renewals, promotional deals expiring and, even unannounced price increases. Companies that operate under the subscription-based model count on the idea of ‘out of sight, out of mind’ when dealing with their customers. Stash away those savings by preventing the mindless ways you might spend your money.
- Check on your streaming service packages. Are there bundles available at cheaper rates? Do you use the streaming channel enough to warrant paying for it?
- Are you reading all those magazines you’ve subscribed to? Is the digital version cheaper?
- Do you own several different storage cloud accounts? Do you really need Dropbox and Google Drive?
- Some smartphone and tablet apps require subscriptions to be used. Do you still use them? Did you delete the app, but forget to cancel the subscription?
Credit Cards
First, avoiding debt is rule number one when talking about credit cards. A credit card’s value increases for the consumer when utilized the proper way. If you’re making a big purchase but can’t afford to pull that large amount out of your bank account at the time of purchase, then using the credit card with the intent on paying it off in the upcoming months is the right way to go.
Once you have your payment plan, you can start using credit cards to gain reward points. Some cards offer points on certain categories like dining, travel and gas. Travel and airline-based cards will let you earn miles when making travel-related expenses. There are many cards that offer cash-back incentives as well. You could receive a small percentage back on all purchases and even higher based on categories of spending. These cash back points can be used as statement credits, toward online purchases, or gift cards.
Making Savings Automatic
Using the same premise discussed before of ‘out of sight, out of mind’ — but this time to your advantage — setting up auto drafts will have you putting money away regularly with little effort on your part. You can prearrange a certain amount of your paycheck to be deposited into a separate savings account and watch it grow. Its harder to spend money when it’s not in your checking account.
Once you have this extra savings money, now it’s time to make it work for you by contributing to your investment portfolio over time. The general busy nature of your life will no longer interfere with your memory to save and put away. Make it so the decision is no longer in your hands, but automatic on payday.
App-Based Help
There are dozens of financial apps on the market that can help you save and make your money work for you. Here are a couple that we like:
Acorns
As the website states: “Invest spare change, invest while you bank, earn bonus investments, grow your knowledge and more.” This app is designed for novice investors and people who have limited knowledge in the investment world but are looking for a beginner-friendly way to get involved. The idea behind Acorns is to round up your digital transactions to the nearest dollar. Then that extra amount is invested into your Acorns account. Depending on your plan, you should expect to pay a $3-$5 fee a month for service.
Digit
Very similar in its premise as Acorns, Digit allows you to take a pre-determined, small amount of money out of your checking account every day or every other day. The A.I. within the app analyzes your checking account balance, expected incoming, personalized savings goals, incoming bills and recent spending trends. The money removed from your account is then used by Digit for investments. The website tells it all: “Digit budgets, saves and invests for you.”
Something to look out for in the future, Digit was recently purchased by Oportun in November 2021, so it’s possible the name of the app could change.
As always, the SKG Team is available to answer all your questions relating to outside of the box and more traditional ways to save your money.
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