Why You Should Try These 3 Money Tips Today

Why is saving money so hard for the majority of people? That truly is a million dollar question, when you consider the fact that most aren’t saving much, if any, as far as a nest egg is concerned, in addition to that one million dollar seal of approval that is the amount of money you’ll most likely need to retire.

But a million dollars might as well be a billion since the average person struggles just to have a few hundred dollars saved in a savings account, much less socking away that kind of lucrative lump sum any time soon.

The reason behind most of what ails the masses is a variety of money saving tips they’re not implementing, despite the fact that they're simple, easy and don’t require all that much aside from planning.

More than 50 percent of the population in the United States is ill-equipped for a financial emergency, with one in five Americans having zero dollars stashed away, and one in three having a mere $500.^[1]

This isn’t by accident, what with spending superseding budgeting and saving, simply living beyond your means and going from one paycheck to another with little rhyme or reason behind it, other than struggling one month to the next.

Plenty of statistics abound as to what the national average is as far as housing, transportation, utilities and food in terms of budgeting amounts, but the real issue is more about what you can afford specifically.

For example, the average person spends $1,400 on housing, and another $563 a month in food but, with the former for instance, should be 25 or 30 percent of your entire budget (housing).^[2]

That percentage seems more what a person or family should shoot for, rather than a $1,400 “average.” Being able to understand your financial limitations ultimately is going to have you in a better spot money wise, but often overlooked are the things that those who are adept at saving and relatively “good” with money do as if it were simple routine, and the general public overlooks on a consistent basis.

Being savvy with your savings prowess and wanting to retire before 90 means you’ll want to start saving right away, but are you prepared to save 20 percent of your income after taxes, because that is the minimum amount you should be putting away?^[3]

Figures and facts like that escape most, and that truly is the ultimate goal you should be setting for yourself.

That said, you can throw out percentages all you want, but if you aren’t putting those proverbial tools in your money tool box, then it won’t matter if you say 5 percent or 500, you simply aren’t going to be saving any time soon.

That’s why you should value the simplicity that are three money tips you need to start doing today; the foundation of what it means to save smart and have something to show for it after your next paycheck and beyond doesn’t start with the highly complicated or some sort of nine step plan that has you doomed to fail.

Do you want to be the person who has $0 saved or a meager $500 or the individual leading by example and has their finances on high alert, saving at all costs and not worrying much about emergencies like brakes for the car, bald tires, roof leaks or anything else that life throws your way.

Here are three money tips that you need to start (thinking of) now:

1. Have and, most importantly, follow a budget

Has anyone every told you to leave your debit card at home all day while you’re at work?

What seems like a radical step toward saving money actually is something you can try in order to stick with a budget.

Yes, you know, that system you have in place where you look at income and expenses and determine how well you’re doing (or not so well, too).

The debit card trick is one that helps individuals avoid eating out at restaurants for lunch, for example. Instead, try giving yourself cash for the week ($20) for lunch, rather than spending $10 or $15 per day.

That’s just one of many tricks to keep your budget in tact.

Then again, if you don’t have a budget, what’s the point?

And that is where the issue lies.

You have to create and follow a budget, with an emphasis on the latter.

Only one in three Americans have a detailed budget they follow.^[4]

That 33 percent who are budgeting, you might assume, are part of the wealthier crowd, perhaps a couple making a six figure income each, who are only half-heartedly attempting to “budget” but really only succeed as a result of just having more income.

Not so fast on that one, either.

A hypothetical budget of a $200,000 per year household shows that they have about $5,700 leftover for any additional savings or retirement, not really that much when you consider the former number.^[5]

Some of that can be dug into a little deeper, such as the “two vacations per year,” but when you look at that amount of money, you can see just how important not only budgeting remains but also checking over what you’re spending your money on too, even if you presumably have more than enough income.

What typically creates a disconnect between the average person and budgeting isn’t so much not knowing how (expenses vs. income) but rather the intricacies of how it works. The 50/30/20 rule is a lot easier way to make this process easier.

Fifty percent of your budget goes toward needs, 30 percent toward wants and another 20 percent toward savings. That allows budgeting to be broad for beginners and then expounded upon after that point, when necessary. Also, you can determine what falls into wants versus needs realistically, such as housing, education and utilities versus a second car, vacations and shopping for clothing far too often.

As for impulse shopping, consider the 24 hour rule: simply wait before you buy hastily, and give any purchase of substance 24 hours before you ultimately decide if it’s worth buying. About half the time, you don’t go back for it, because you have time to rationalize and can’t justify the cost versus what you’re buying.

2. Make sure your emergency fund is realistic

How much is truly enough for an emergency fund?

That debate often is met with harsh reality of numbers and dollar amounts that don’t make sense for everyone.

The problem with financial advice and money tips is that they’re broad, often times focusing on averages (which is fine) but often times that allows the task of saving to be so very daunting that the easier path is to continue down the one you’ve set where you can’t save and you’re more content with “getting by.” One statistic that does matter and is telling is that only about 67 percent of Americans could scrounge together $2,000 if they needed to.^[6]

While that sounds decent, you have to look at a number like $2,000 (or any number really) and determine what makes sense for you and your situation.

Maybe $2,000 is perfect for an emergency fund if you’re only making and living on $500 per month, which undoubtedly sounds unrealistic but still could be palatable for a person.

General rule of thumb when it comes to savings and emergency funds isn’t about a dollar figure as much as it is a number of months you need to have saved in relationship to what you make after taxes.

You should have three to six months of your salary saved.^[7]

If you live on $5,000 a month, you need to have between $15,000 and $30,000 in the bank, and that comes from being able to support yourself should you lose your job.

For someone who lives on $1,000 a month, then you go and tell them they should have $10,000 in the bank, while that would be nice, isn’t a realistic emergency fund. That isn’t to say that figure can’t or shouldn’t be a goal in mind, but also there’s no reason to get yourself into the mode of failure if you’re actually above and beyond where you ultimately need to be.

You have to remember that 67 percent of the population doesn’t have $1,000 saved in total, with 21 percent saying they have nothing.^[8]

Perspective is a powerful tool that should motivate and not usher in complacency as part of your financial planning.

3. Make more money, naturally

This one sounds easy enough, right?

Maybe not.

Truthfully, it’s not as hard as it sounds either.

One of the ways you can help save money is to earn more, and that can come in a variety of forms, whether it’s a garage sale, selling old items online or just having a part-time job that is conducive to earning extra income.

The real key, however, is adding that extra income and not spending more, either.

Part-time jobs often are a hard sell, especially if you have other commitments outside of the 40 plus hours you’re putting in, such as kids, activities, etc.

The average salary for someone working part time is $24,500.^[9]

Granted, you might not be wanting to work 25 or 30 hours additional per week, but consider a 10 hour per week job and one third of what that national average is.

You also have to consider the convenience factor of a part-time job, too, such as if you have mornings and afternoons free, something along the lines of a bus driver comes to mind. They make in upward of $15 per hour, as an example.^[10]

As for online selling and garage sales, don’t immediately rule out either as time consuming or not worth the effort. The average garage sale, when done right, promoted well, can gain you anywhere from $500 or $1,000.^[11]

That hardly seems like a waste.

The idea of generating more income might sound easier said than done, but not if you’re thinking long-term and assuming that part-time might be something that is feasible, along with raiding your closets and garages for items that are sitting there waiting to go toward your bottom line.

You can’t quite put your finger on why saving money for most is so difficult.

The truth can be somewhere between not making enough money, inflation or simply the art of spending, how it makes you feel, getting what you want, even if you can’t afford it.

Being good with money is a relative term, and really boils down to simple things that everyone who is “good” do, without hesitation.

They budget. They set realistic goals, and they spend money when it makes sense, while consistently and constantly changing the landscape of how they look at expenses or analyze (almost to a fault) how much they’ll spend, if anything, on a product, and refuse the impulse buy.

That is just a small sample size of what matters, and managing money can be so much more than that.

To some, they’ll work three jobs and spend on a lifestyle they want, but always manage to save what they need to be successful, longer term. Others stretch the dollar far, barely spend, and love every second of that.

Whichever end of the spectrum you fall on or if you’re totally off the financial grid, you have to find a system that makes sense for you, but just deciding ultimately to do nothing won’t yield results, one way or another, good or bad.

Instead, you’ll flounder, and find yourself part of the status quo that struggles with money and has little or nothing to show for all that financial stress.