Learn how to save money living on your own, and take full advantage of your new-found freedom.
Learning how to save money living on your own is a journey. You’re not going to have it mastered right away. With a few simple steps, however, you will put good habits in place. They’ll last your entire life, if you let them. Take control of your finances and become established, even as a young, single person. Here’s all you need to know to start saving money while you live on your own.
Take full advantage of your 401k employer match
Most full-time workers have access to an employee retirement plan. Did you know these often come with free money, above and beyond value gains? Businesses will often match the amount you add to your retirement fund, or a portion of those amounts. This kick starts your retirement savings using pre-tax funds, and puts you in a proud-to-save mindset you can easily carry over to other areas of your life.
Automate payday contributions to savings accounts
Whether you have one savings account or several created for your financial goals, it’s important to automate your investments. Take the money out of your paycheck before you even see it, by setting up automatic transfers from your paycheck deposit.
Save an adequate amount
Savvy savers put away 10 to 20 percent of their paychecks every month. Your emergency fund (the money you save with no intention to spend for any reason other than a true emergency) should be enough to cover at least six months of your expenses if you should lose your job. Once you’ve built up an emergency fund, start saving money for other purposes.
Focus on intrinsic vs. extrinsic motivations
U.S. News & World Report does an excellent job of describing the importance of how we spend (and earn) and how money matters impact the brain. It’s clear that money doesn’t buy happiness, and stressing over gaining more money is more likely to result in ulcers than fulfilling life experiences. That said, when money is used to fund your fundamental goals, aimed at personal growth, interest and fulfillment, over those goals you believe will impress others, there are real benefits to your physical and mental health. That positivity makes it easy to make savings a priority, especially when compared to the overwhelming stress involved when your ego is on the line.
Spend your money in thoughtful ways
All the greatest financial advisors press the importance of spending less than you earn. It doesn’t matter if you’re a billionaire or working part-time at minimum wage. Spending less than you earn is the key to maintaining a positive bank balance. The problem? It’s very easy to spend more than you earn, without even thinking. The only way to prevent blowing your budget on random purchases is by slowing down, noting how much you are spending and what you’re using your money to buy, and then evaluating whether that adds to your life.
Adopt affordable alternatives to the essentials
A sports fan may consider an expanded cable package a necessary investment. Besides, it’s much cheaper to watch games at home than in person. There’s nothing wrong with investing in things that give you joy, just be mindful of adequate alternatives. For instance, many sports streaming channels allow you to buy and stream games online. Using the appropriate equipment, you can stream them straight to your television, which may offer major benefits over signing up for expensive cable service. From swapping out individually wrapped string cheese for a bundled order to opting for a digital library subscription versus buying all your books brand-new in hardcover, there are thousands of ways to adequately replace your favorite things while enjoying big savings.
Visit your nearest Title Tree store for more tips on spending less, or, if you need a little help making ends meet right about now while you learn how to save money living on your own.