Tag: savings


How to Lower your Utility Bills

Whether you rent or own, looking for tips on how to lower utility bills might be at the top of your budgeting to-do list

According to ApartmentList, the typical renter spends around $100 to $150 per month on utilities. For homeowners, the average monthly cost climbs to around $320

If you’re trying to save money or pay down debt, then cutting utility costs can help free up some much-needed extra cash. 

Take a look at these tips to help you lower your utility costs.

Save on Heating and Cooling

Running the A/C all summer and the heat all winter can take a toll on your wallet but here are some ways to keep more cash in your pocket. 

1. Invest in a smart thermostat: Smart thermostats can be set to adjust temperature automatically, based on a schedule you set. 

“When you can set your thermostat for waking, leaving, returning and sleep you should be able to consistently set a lower temp during the times when you don’t need to keep your home warmer,” says Ryan Guina, founder of The Military Wallet and Cash Money Life

According to Energy Star, a programmable thermostat can save you up to 10% per year in energy costs. 

2. Use ceiling fans: Ceiling fans can help redistribute warm or cold air throughout your home, meaning your thermostat doesn’t have to work as hard and your electric bill shrinks. They can also take the pressure off your HVAC system, which can help it last longer so you don’t have to replace it as often.

3. Seal leaks around windows and doors : Caulking leaks around windows and doors is a quick fix that can cost $30 or less and save you anywhere from 10% to 20% on energy costs

It makes no sense to crank the heat or AC when your home has air leaks, which is pretty much the same as throwing money out the window,” says Michael Outar, owner of Savebly

4. Heat and cool strategically: According to Brian Stoddard, director at Homewares Insider, the best strategy for managing utility costs is to avoid heating or cooling unused rooms.

“Firmly shut the doors and make sure there’s no draft or a possibility of the heat or air-conditioned air spreading inside them,” he says.  You can also close off vents in those rooms and close blinds to prevent air from escaping. 

5. Service your system regularly: A simple strategy for how to lower utility bills is to make sure your heating and cooling unit is in good working order. Changing the air filters monthly, clearing away leaves or other debris from around the outside unit, and servicing your HVAC system in the spring and fall can help keep it running efficiently. 

6. Choose energy-efficient upgrades: Heating and cooling systems aren’t built to last forever and if it’s time to replace yours, choose your new model wisely. “Air conditioners, particularly older ones, can use a significant amount of energy,” says Glenn Wiseman, sales manager at Top Hat Home Comfort Services

“Energy Star estimates you can save 20% on cooling costs by replacing your central AC unit if it’s more than 10 years old.” 

Save on Electricity Bills

Wondering how to cut an electric bill in half? Or at the very least, spend less on powering your apartment or home? Give these money-saving measures a try. 

1. Trade out old lightbulbs: A simple way to save money on your light bill is to simply switch to energy-saving light bulbs, Outar says.

“It’s an upfront investment that will save you money for years to come.” 

2. Make sure to turn your lights off: Remember how your mom always told you to shut off the lights when leaving a room? The same principle applies now.  “If you want to save on your electrical bills, turn off your lights! If you’re not home, nothing should be on,”  says Ashley Peeling, regional marketing manager at CLV Group

Another bonus tip: Always unplug your phone or laptop once it’s done charging. 

3. Lower the temperature on the water heater: If your hot water heater is powered by electricity, you could save a few dollars on your bill by reducing the temperature. This means less power is used to heat the water in the tank. Another option is to choose a tankless hot water heater instead, which can be 24% to 34% more energy-efficient than a traditional hot water heater. 

4.Check the temperature on the refrigerator : Setting your fridge temp too low can cause it to work overtime, running up your electric bill in the process. Instead, set the temp to the ideal range of 35 to 38 degrees Fahrenheit


Water Bill Savings Tips

Water keeps your dishes and clothes clean, not to mention keeping you hydrated. But, it can eat up a chunk of your utility budget. 

So, last but not least, let’s take a look at how to save money on a water bill. 

1. Take shorter showers: Baths can be a water-waster but so can showers if you’re lounging under the stream for 10, 20 or 30 minutes at a time. A simple fix for how to save money on water bills?  “Take shorter showers and don’t let the water run while you’re either brushing your teeth or shaving,” Peeling says. 

2. Cut water use in the kitchen: If you normally do dishes in the sink with the water running, turn off the tap and consider using the dishwasher instead. Make sure you’re running full loads so you’re minimizing water use as much as possible. 

3. Opt for low-flow fixtures faucets: Leaving your faucet or showerhead running can waste water, even when you’re taking a shower at lightning speed. Opting for low-flow fixtures is more efficient. 

“They use less water than traditional faucets and showerheads, which will save you money,” Outar says. 

4. Batch laundry and skip the hot water cycle: Instead of doing laundry whenever the mood strikes, pick one day a week to clean your clothes. Run full loads only and use high-efficiency detergent, which can help your machine run more efficiently and get your laundry cleaner. And of course, skip the warm or hot water cycle and only wash clothes in cold or cool water instead. 

What Will You Do With the Money You Saved on Utility Bills?

If you’re using these tips to slash your heating, cooling, power or water bills, don’t let the money you’re saving go to waste. Tuck it away in a savings account until you’re ready to use it for one of your financial goals. 


How to Create a Five-Year Financial Plan

You might have a five year plan in place for your career but what about your money? 

When it comes to setting financial goals – and achieving them – planning can play a big part in your success.

If you’re wondering how to create a plan to manage your money and reach certain financial milestones over the next five years, we’re here to help. 

Here’s what you need to know to create a roadmap to reach your money goals. 

Write Down Specific (but Realistic) Financial Goals

You might already have some money goals in mind but if you don’t, you can kickstart your 5 year plan by setting some. Setting clear goals can help you get organized so you can outline the actionable steps you need to take to pursue them.  

When you’re setting goals for your finances, there are a few rules to follow. For example, it helps to make sure your goals are:

  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-bound

If you don’t recognize the above points, they spell out a formula for setting “S.M.A.R.T.” goals. The idea is that when you’re setting financial goals, or any other kind of goal, you have a specific target you’re working toward that’s measurable. From there, you can reasonably achieve your goals within a set time frame. 

As you write out your money goals, focus on the realistic part and really think about what you can do in the next five years. For example, maybe you can’t bank $1 million on your current salary. But, you could start a side hustle or angle for a promotion at work to increase your income so you can save an extra $5,000 or $10,000 a year. 

Keeping your goals realistic and tied directly to your current financial situation can help you avoid getting frustrated and throwing in the towel. When your goal is challenging but still within reach, it’s much more motivating to keep pushing forward, especially if you can see yourself making progress month over month or year over year. 

Once you’ve honed in on some specific goals, break them down even more. So, say you want to save $5,000 a year for the next five years. That’s a big number to start with but if you break it down monthly, it comes out to $416 and change. If you divide it up weekly, it’s $96.15. And daily, it’s just under $14.

Saving at $14 a day may not seem as intimidating as saving $5,000 a year. You can take that smaller number and look at different ways to cut back on spending or increase your income daily, weekly and monthly to hit your goal. 

What Should Your Financial Plan Look Like? Four Factors to Consider

Personal financial planning is just that – personal. 

Your five year financial plan may be completely different from your best friend’s or sibling’s. So, as you create your plan, keep in mind that it should be tailored to fit you and your financial circumstances.

If you’re not sure what to include, there are some guidelines you can follow. For example, there are four key questions to focus on. Take a look:

1. How Much Debt Will You Pay Off in Five Years?

If you’re carrying debt – whether this includes student loans, credit cards, a car loan or a personal loan – you may be in a hurry to pay it off. After all, it’s easy to get discouraged if you’re constantly thinking about how your debt is keeping you from getting ahead financially. 

Yet, when shaping your 5 year plan, you have to think about how much debt you can realistically pay off over that time period. The other side of the coin is thinking about which debts you want to get rid of first. 

Here’s where it’s helpful to look at the emotional versus financial cost of debt. Say you have $10,000 in credit card debt and $10,000 in student loans. The credit card debt carries a 17% APR versus 7% on the student loans. 

The credit card debt is costing you more financially, but the student loans can take a mental toll on you if you’ve been paying them down for several years. You may be fed up and ready to wipe them out. 

Looking at your debt through that lens can help you shape your financial plan and debt repayment strategy. If you want to get rid of the highest interest debt first, for example, you might choose the debt avalanche method. On the other hand, the debt snowball method could help you get a quick win by paying off your lowest balance debt first. 

Either method can help you pay off your debt over the next five years. Crunching the numbers can help you decide which makes the most sense, based on your budget and other financial goals.

2. Will You Incur Any New Debt Over the Next Five Years?

While you may be focused on getting rid of your high-interest credit card debt or knocking out student loans, it’s also important to consider whether you’ll add to your debt load while working your five year plan. 

For example, you may decide to get a car loan to purchase a new car. Or you may venture into home ownership, which would require you to take on a mortgage loan.

Those goals may be just as important to you as paying off debt. The key is finding a way to include them in your financial plan. That might mean rethinking your budget to find extra money you can save, while still keeping up with your debt repayment. 

If saving money for a down payment on a home is a goal, for example, look at what you can do to make that easier. Using direct deposit to automatically send part of your paycheck to your Chime savings account, for instance, can help you grow your money without having to think about it. 

3. Will You Be Making More Money?

Ideally, what you’re taking home in your paychecks now will be higher five years down the road. You may get a promotion or pay raise, move to a new company that offers a higher salary or start a profitable side hustle that brings in some extra income. 

The upside of that is that you should have more money to put toward debt, add to cash savings or get started with saving for retirement. The downside is that you may face more temptation to spend once you start earning more. 

Accounting for higher income in your 5 year plan can help you make the most of those extra dollars instead of giving into lifestyle inflation. A good way to stay on track with this is to review your budget monthly and yearly to see how your expenses, savings and debt payoff amounts change over time. 

You can then compare that to your income the previous year and your expected income next year. For instance, say your total annual income is $60,000. You spend $55,000 of that but you know that next year you’ll get a 2% raise, putting an extra $1,200 in your pocket before taxes. 

You could then add that money into your financial planning efforts, based on how you prioritize your goals. 

Likewise, if paying off debt is most important, you could put all of that extra cash toward what you owe. On the other hand, if you’re balancing saving with debt, you might do a 60/40 or 50/50 split instead. 

4. How Much Will You Save in Five Years?

Saving is a pretty broad term and while it’s good to stash money away, those dollars should have a purpose. As you’re handling your personal financial planning to-do list, think about which savings goals matter most. 

That might include:

  • Creating or growing your emergency savings fund. 
  • Setting money aside to buy a home. 
  • Putting money into an IRA for retirement. 
  • Saving money so you can become a digital nomad and travel the world.
  • Building a cash cushion so you and your spouse can start a family.
  • Creating a startup fund so you can eventually start your own business. 

If you have multiple savings goals, prioritizing them can help you decide where to put your dollars first. Out of these examples, putting money into emergency savings and a retirement account are two biggies. An emergency fund can help you cover unexpected expenses, without having to borrow money. 

With retirement savings, it’s best to start putting money aside as soon as possible. That’s because when you invest money in an IRA or in your 401(k) at work, you can cash in on the power of compounding interest. Essentially, this is the interest you earn on your interest. The longer your money has to grow and compound, the bigger your nest egg can be by the time you’re ready to retire. So, if you haven’t started saving for retirement yet, there’s literally no time to waste. 

As you size up your savings goals, consider how much you can afford to allocate to each one over the next five years. Go back to your budget and income expectations to make sure those goals are realistic. And if you can’t save for everything at once, prioritize what’s most important to your financial health first and start from there. When you reach that savings goal, cross it off your list and continue working your way down. 

Create Year-to-Year Check-Ins to Help Accomplish Your Finance Goals

One thing to keep in mind about financial planning is that your five year plan isn’t necessarily set in stone. 

It’s good to revisit your plan at least once a year to review your written financial goals and make sure you’re still on track to reach them. If you need to make a few tweaks because of a life change or career change, don’t panic. And don’t stress out if you aren’t able to hit every goal exactly to a tee. Ultimately, creating a 5 year plan is about building a strong foundation of personal finance skills to help you create a brighter financial future. 


What’s the Difference Between a Checking and Savings Account?

If you’re opening a bank account, you might be scratching your head wondering: What’s the difference between a checking and savings account? And do I need both? 

Perhaps you are like some people (*raises hand*), and you once thought a checking and savings account were one and the same thing.

Yet, while these two types of accounts may be similar, they also have some key differences.

In this guide, we’ll go over the benefits and downsides of each type of bank account. We’ll then examine the differences between the two. Lastly, we’ll break down how having both bank accounts can help you with your money goals.

What is a checking account?

Checking accounts are also known as “transaction accounts” because they’re designed for just that: taking money out and putting it in. In other words, a checking account is where you keep money for your day-to-day spending.

Here’s what checking accounts are typically used for: 

  • Receive or send cash through a payment platform (aka Venmo, Cash app)  
  • Deposit your paychecks
  • Set up automatic payments for your bills 
  • To send checks 

You may be wondering: Does a debit card go along with a checking or savings account?

The answer: A debit card is typically linked to your checking account. So, when you use your debit card to pay for groceries or take money out of an ATM, that money is coming from your checking account. 

The pros of a checking account:

You can freely make unlimited deposits and withdrawals as money in a checking account is very liquid. Plus, if you have bills to pay, you would generally pay for them using funds in your checking account. 

The cons of a checking account: 

Checking accounts aren’t really the best place to keep your money for the long-term. Why? Checking accounts don’t always pay interest. 

What is interest, you ask? It’s what your bank pays you for holding onto your money. If a checking account does pay interest, the APY (annual percentage yield) tends to be tiny.


What is a savings account? 

A savings account is where you stash money to save up for future goals.

Whereas money in a checking account is meant to be fluid and moves in and out of your account frequently, you’d keep money in a savings account for longer periods of time. You may even use your savings account to save for a rainy day or pay for unexpected expenses. 

The pros of a savings account:

Savings accounts are a safe way to stash your money. They can also be an easy way for you to “hide” money from yourself so you don’t spend it. Having a savings account can also hold you accountable for your future goals, like saving enough money for a vacation, new car, etc.

Plus, you can typically earn some interest (more than you would in a checking account).

The cons of a savings account: 

Whereas checking accounts offer unlimited transactions, savings account often have restrictions on the number of transactions you can make. That’s due to a regulation from the Federal Reserve, which limits withdrawals or transfers in your savings account or money market to six a month. 

You also typically won’t earn as much in interest as you would in an investment account, such as a 401(k) or IRA. According to the FDIC, the average interest rate for savings accounts was 0.09% in August 2019. And while some online banks and high-yield accounts offer a higher interest rate, they also usually require higher minimum amounts. 

Money market accounts and certificates of deposits (CDs) also usually offer higher interest rates than savings accounts. They tend to have higher minimum deposits and other requirements. For instance, a CD requires you lock in the money for an agreed-upon period of time, such as 12 months, 18 months, and so forth. If you withdraw your money preemptively, you’ll be dinged with a penalty.

What is the difference between a checking and savings account? 

Now that you understand what both checking and savings accounts are, you can likely see why you can use both of them.

For example, you can pull money from your checking account to make purchases, pay bills, and pay back your friend for last week’s dinner — that sort of thing. Your savings account, on the other hand, is where you keep money for a longer period of time. 

When you have both a checking and a savings account, you can easily auto-save money so it goes from your checking to savings account. On the flip-side, if the unexpected happens and you need access to your money in a pinch, you can easily transfer money from your savings to your checking account. 

Unlike investment accounts, the FDIC insures money in each checking, savings, money market and certificate of deposit account up to $250,000 per depositor, per bank. 

What should you look for when you’re shopping for a checking and savings account?

When determining the best accounts for you, here are a few key things you should carefully consider:

1. Fees

Banks make their money in a number of ways. And one of them is through charging fees. 

Common fees for checking accounts include the following:

  • ATM fees

If you’re taking money out of an ATM outside your bank’s network, you’ll typically be charged a fee of anywhere from $2 to $4. Note that sometimes a bank might charge an ATM fee that’s in-network. It just depends on the bank.

  • Overdraft fees

If you don’t have enough money in your account for a transaction, you might be dinged with an overdraft fee. Overdraft fees typically are $35 per transaction. Whereas there might be a cap on how many overdraft fees you can incur in a given day, this cap can be anywhere from four to six a day. 

  • Monthly fees

If you don’t maintain the minimum amount in your account, you might be charged a monthly fee. Some banks waive the monthly checking fee if you set up direct deposit. 

  • Foreign transaction fees

If you’re traveling out of the country and use your debit card, you might be charged a fee for each transaction. It’s typically 3% of each transaction.

  • Card replacement fee

If you lose your debit card, the bank might charge a fee to send you a new one. This could range anywhere from five dollar to $25 a card. 


Common fees for savings accounts include:

  • Monthly maintenance fees

Sometimes you can avoid checking account fees by maintaining a minimum balance or setting up automatic transfers, making a minimum number of transactions in a given month, or having multiple accounts with the same bank. 

  • Overdraft fees

You might be able to avoid an overdraft fee if you have overdraft protection. However, this oftentimes comes with a fee. And even if you have overdraft protection, you might be charged a fee, but just a lower one.

To avoid being dinged with fees, look carefully at the minimum requirements to avoid monthly fees, or look for a bank that doesn’t charge any fees whatsoever. 

  • Minimum balances

Depending on your bank, there might be a minimum balance to open an account. If you don’t maintain this minimum balance, you might incur a fee. 

2. Convenience

Now that we’ve covered all the fees you might have, it’s time to take convenience into account when choosing a bank.

For starters, check the bank’s network of ATMs and see where you can withdraw money from a fee-free ATM. Also, do some poking around to see how their customer service fares. Is it easy to get a hold of someone? Are they helpful once you get someone on the line or via chat?

If you’d prefer a brick and mortar bank, check on the hours and make sure the bank is open at convenient times. And regardless of whether you bank at a local branch or an online bank, make sure they have an intuitive and easy-to-use app. This way you can do all your banking – from requesting checks to paying bills to splitting a bill with friends – from the palm of your hand.  

How to open a checking or savings account

Whether you’re opening an account online or with a brick-and-mortar bank, you’ll need to supply personal information such as your name, address, and date of birth. You’ll also need to provide an ID number, like your Social Security Number. 

If you have questions about the bank’s services or opening an account, reach out to the bank to talk to someone in customer service. 

And here’s a final pro tip: Want to avoid unnecessary fees? Chime is on a mission to change banking, with no hidden fees.  


What is a Sinking Fund and Why do You Need it?

When I first started budgeting, sticking to my monthly spending amount was tough. 

I’d start the month thinking I had a great budget and would only spend a certain amount. But by mid-month, I’d fall off track. Car insurance was due! I needed to buy a birthday gift for my Mom! Things that I needed to pay for were constantly catching me by surprise. As a result, I’d blow my budget more often than not. 

The frustrating part was that I had failed to plan for known expenses.

After my many failed budgeting attempts, I heard about a sinking fund, a type of savings account that you use to set aside money to save for something in the future. I immediately began using a sinking fund for a couple of things, and eventually began using it to automatically save for just about everything.

Not only has a sinking fund helped me stop blowing through my budget each month, but it’s also helped me become more thoughtful and proactive with how I spend and save my money. 

What is a sinking fund?

A sinking fund lets you set aside a little bit of money each month to help prepare you for an expense. Sinking funds can be used for things like: Christmas presents, travel, a new car, or an irregular bill.

Some examples of uses for sinking funds:

  • Attending weddings
  • Buying a new car
  • Paying insurance bills
  • Making property tax payments

When you’re transferring a little bit of money into a sinking account monthly, you’re prepared for times when you have to make the bigger cash outlays. 

Why is a sinking fund important?

No matter how well you plan out your monthly expenses, if you’re not factoring in known, irregular expenses, you’ll be totally unprepared when you’ve got to come up with the cash. This can leave you reaching for your credit card every year at Christmas and starting off the New Year in debt. The average American racks up over $1,000 in debt during the holidays

But what if you were able to set aside $50, $75, or $100 each month to save for the holidays? You’re now suddenly much more in control of your spending and not risking your financial health to buy presents. 

Aside from helping you prepare for things like excess holiday spending, a sinking fund can help you dream big when it comes to your money goals. Want to buy a new car and pay cash? Want to take your family on a special and memorable summer vacation? A sinking fund can help you do these things. 

Sinking fund vs emergency fund: what’s the difference?

If you put money into an emergency fund, you might wonder if that’s really different than setting aside money in a sinking fund account. Yes, it is! Money in an emergency fund is to be used for emergencies only — like your car breaking down or losing your job. It’s a bad habit to withdraw money from your emergency fund for non-emergencies. When a real emergency strikes, you’ll be happy to have that cash set aside. 

Money in a sinking fund is used for known expenses like car insurance, vacations, or holiday gifts. You can spend that money without worry or guilt because you’ve planned and saved for it. 

Sinking fund examples

How does this actually work? Let’s say you have three things that you’ve decided to save for with a sinking fund: car insurance, Christmas gifts, and summer vacation. 

For each expense, list out how much it will cost and when you’ll need the money:

  • Car insurance: $600 bill due in six months
  • Christmas gifts: $750 saved in three months
  • Summer vacation: $1,200 saved in 10 months

Next, break each expense into the monthly amount you need to save:

  • Car insurance: $100 per month
  • Christmas gifts: $250 per month
  • Summer vacation: $120 per month

Once you have that calculated, include those expenses in your monthly budget and set up a monthly automatic transfer to your sinking fund. 

How to create your own sinking fund

You’re hopefully now sold on how great a sinking fund is. And it gets even better because it’s easy to start your own sinking fund. Here are the steps you’ll want to take:

  • Open a bank account specifically for your sinking fund. You’ll want to keep this money separate from your other accounts so you know exactly how much you have available to spend. 
  • Make a list of all the things you want and need to save for, as well as how much they cost. Think about things you have to pay for (taxes, insurance) and the things you’re excited to spend money on (vacations, a new car, holiday spending).
  • For each item, figure out the date when you’ll need the money. 
  • Calculate how much you need to save each month to have enough saved by the time you need it.
  • Set up monthly automatic transfers to move money into your sinking fund account. And yes, you really do need to make these transfers automatic

Are you ready to start a sinking fund? 

If you find yourself constantly unprepared when irregular expenses pop up and reaching for your credit card, it’s time to start a sinking fund. 

While it’s a little extra work up front to set up your transfers, it’s worth it in the long run. To start your sinking fund, check out the Chime app that makes mobile banking easier.  And you can use the automatic savings feature to reach your sinking fund goals even faster.

Now that you know how to get started, what are you excited to save for? 



How to Save Money from Your Salary

Saving money may be at the top of your financial to-do list. 

The challenge is figuring out how to save money from salary while covering your basic living expenses, paying down debt or working toward other financial goals. 

If you’re looking for tips on how to save money, you’re in the right place. Take a look at 6 strategies that can help you save money from your salary paycheck.

1. Break your paychecks down

First things first, go over your paycheck to see how much take-home pay you have to work with. Your take-home is what’s left after your employer takes out taxes, insurance and any other deductions, like 401(k) plan contributions from your salary. 

Speaking of 401(k) contributions, an easy way to boost savings is to notch up your contribution rate. 

If you’re wondering how much to save monthly, there’s a simple rule you can follow. At the very least, it’s good to save enough of your salary to get the full employee match into your retirement plan if your employer offers one. 

So, as you’re looking over your paycheck, figure out what your current contribution rate is and see whether you can bump that up by a percentage or two. Even a fractional increase can make a difference in how much you’re able to save long-term. This paycheck impact calculator can help you gauge how your take-home pay would be affected by upping your 401(k) savings rate. 

2. Find money in your paycheck to save

If you’ve been struggling to save so far, this is where you’ll need to dig into your budget to see where you may be able to free up extra cash. 

“When it comes to saving money from a paycheck as a salary employee, it all comes down to keeping a good budget,” says David Pipp, founder of finance blog Living Low Key

“If you have money to cover your cost of living and a little money for fun, everything after that should go towards savings.”

For example, one of your biggest budget expenses may be food. If you’re dining out a lot, you could look for money-saving hacks to cut down on the cost. Or, eliminate some meals out and eat more often at home. 

Here are some helpful tips for how to save money on groceries:

  • Plan meals for the week, based on what’s on sale. 
  • Create menus that are designed to minimize food waste.
  • Shop with a list and stick to the list.
  • Consider using your grocery store’s pickup service if it’s free to avoid making impulse buys. 
  • Use coupons and cash back apps to earn cash rewards or discounts on groceries.
  • Check for bargains at your local farmer’s market if you have one. 

Other expenses you may want to downsize include utility bills or subscription services you don’t use. You could also find savings in your budget by switching to a bank account with no fees

3. Make your debt payments less expensive

Consider how you can make your debt payments less expensive. Refinancing student loans, for example, can help you get a lower rate. This can also lower your monthly payment, giving you more money in your budget to save. The same is true for transferring high-interest credit card debt to a new card with a 0% introductory promotional rate. 

4. Make more money than your salary paycheck

If you’re falling short of your savings goal, maybe it’s time to earn more.

“There are two ways to save more money: earn more or spend less,” says Ben Watson, CPA and personal finance expert at DollarSprout.

“The best way is to do both at the same time: take on extra hours, start a side hustle, mow lawns or go crazy selling unused items on Facebook marketplace while taking a hard look at your budget to see what you’ve been wasting money on,” says Watson.

5. Automate savings from your salary paycheck 

Once you know how much you need to cover your bills and expenses, you can set money aside from your paycheck to put toward your savings.  

There are two simple, yet highly effective ways to do this:

  • Set up direct deposit into your savings account from your paycheck. This way, the money goes straight to savings every payday. 
  • If your employer doesn’t offer direct deposit, you can set up an automatic savings transfer from checking to savings each time you’re paid. You just choose the amount to save and the frequency you want money transferred and you’re done. 

These two savings hacks can also be a great way to build your emergency savings fund or add money to savings for a long-term goal, like a down payment on a home. 

6. Consistency can be your ace in the hole for growing your money 

Here’s how this works. You figure out what you need (or want) to save each month. Instead of putting it into the bank right away, you keep it in cash at home. You do this for a month or two to see if you ever have to dip into your savings for any reason. After that, move the cash to a bank account

If you’re totally new to the saving habit, considering giving this strategy a test run, says Eric Holland, founder of family finance blog High Five Dad

“If you had to dip into savings, evaluate the reasons why,” Holland says. 

For example, it might be due to poor planning or an emergency. Trying this little experiment can help you decide if there are any changes you need to make to your savings strategy. 

How much should you save each month?

That’s a great question and it’s an important one to ask if you’re hoping to stretch your salary paycheck as far as possible. 

The answer for how much to save monthly ultimately comes down to how much you’re taking home, what your expenses are and how much, if anything, you’re paying toward debt. 

But if you’re looking for some specific numbers to work from, the 50/30/20 rule is a good place to start. 

The 50/30/20 rule advocates putting 50% of your income toward your essential expenses each month, spending 30% and then saving the remaining 20%. You can do the math on your own or run the numbers through a simple calculator.

Here’s an example of what that might look like based on the median millennial salary of $69,000:

  • Biweekly paycheck amount: $2,653.85
  • 50% allocation to essential expenses: $1,326.93
  • 30% allocation to discretionary spending: $796.16
  • 20% allocation to savings: $531
Learn more about the 50/30/20 rule here


Using these numbers, you should be putting $531 away into savings every two weeks. Over a year, that adds up to $13,800. 

That number can include the 401(k) plan contributions mentioned earlier if you have an employer plan. So, let’s say you contribute 6% of your salary to your 401(k). Your employer matches 50% of your contribution. This means $6,210 is going into your plan each year, based on the $69,000 

median salary number mentioned earlier.

If you’re basing your savings on biweekly salary paychecks, you’d have to save $291.92 every payday after your retirement contributions are taken out to hit the 20% total savings target

The next step is to make sure you actually have that amount of money in your budget to save. 

Are you ready to save from your salary?

Have you established a regular savings habit yet? If not, there’s no time like the present. 

And as you start saving, remember to give those dollars a job. Having a clear financial goal or purpose in mind for the money you save can help motivate you to stay the course. 


5 Ways to Save Money in an Expensive City

Saving money is already a challenge, but it gets even more complicated when you live in an expensive city. 

I recently moved to California from the Midwest. To say I’ve experienced quite a bit of sticker shock is an understatement.  

While cities like Los Angeles, San Francisco, and New York City come with diverse cultures, endless entertainment, and amazing food, they also come with a hefty price tag. The good news is, you don’t have to sacrifice your bank account to live in the city of your dreams. 

Here’s how to save money when you live in an expensive city:

1. Sell Unwanted Items

We all have odds and ends around the house that we really never use. Rather than cluttering up space with a bunch of useless things, take a couple hours over a weekend to filter through it all. Then, sell the things you won’t miss.

For electronics, furniture, clothes, and everything in between, you can use apps like Letgo, OfferUp, or even Facebook Marketplace to list what you want to sell. Not only will you earn some extra cash but you’ll breathe easier now that you’ve freed up some room in your overflowing closet and other storage spaces.  

2. Use Money Saving Apps 

As you know, there’s an app for almost everything, and that includes those that help you save money and stay on track with your budget. The great thing about apps is that they do a lot of the heavy lifting for you. 

This is especially helpful when you’re living in a big city as you probably spend a lot of time rushing around, commuting, and running errands. Apps, however, can keep you organized and give you the ability to easily check in on your bank accounts while you’re on the go. Whether your goal is to save money, stick to your budget, or make sure you don’t forget to pay your bills, apps help you get it all done without taking too much time out of your busy schedule.

3. House or Pet-Sit for Friends 

Another perk of living in a popular city is that you probably have cool friends with busy lives just like you. It’s a perk because when their busy lives require them to go out of town for several days, you’re probably on their list of people to hit up for a house-sitting or pet-sitting gig. 

There are a lot of pros to this. Not only do you get a mini staycation, but you can spend some time with an adorable pet and make a few extra bucks. If your friend has a fully stocked fridge that you have access to, you’ve really hit the jackpot.

4. Recycle (Seriously)

Of the many things I had to adjust to when moving to California, one of them was paying an extra fee when buying beverages in plastic bottles or cans. The flip-side of that is that I can take those plastic bottles and cans to my local recycling center and get some money back.  

If you tend to chuck your empty bottles and cans into the nearest trash bin, you might want to rethink this. It only takes a couple seconds to set them aside for recycling, and just an hour or so to drop them off at a recycling center every few months. 

No, you won’t get rich from turning in recycled items, but when you’re trying to figure out how to save money, every little bit helps. Plus, you’re doing your part to make the environment better so it’s a win-win situation!

5. Rent Out Your Car or Bike

You might hear a lot about renting out a spare room in your apartment for extra cash, but if you’re a renter yourself, this might not be the best idea. Why? Because if your lease doesn’t allow subletting and your landlord finds out, you could be in big trouble. Making extra money is definitely not worth the risk of getting evicted or other legal consequences.

Still, if you can’t rent out your living space, all is not lost. With the “sharing economy” steadily expanding, there are quite a few other ways to make money.

Car sharing platforms like Turo, for example, give you the opportunity to rent your car to nearby drivers and earn anywhere from 65% to 85% of the total trip price. To give you peace of mind, the service also comes with insurance and allows you to meet the driver and check their credentials before handing over the keys.  

If you want to be extra economical (to go along with your newfound recycling habits), you can rent out your bike, snowboard, or surfboard on Spinlister. Like car sharing services, insurance coverage is included, plus you have the flexibility of setting your own rental pricing.

Finally, Enjoy Yourself

Yes, it’s expensive to live in some cities, but you live in your chosen city for a reason, right? 

The last thing you want to do is spend most of your time complaining about how much everything costs. So, use this guide for inspiration. Find a few money saving tricks, set them in place, and focus your energy on enjoying all your city has to offer. 



A Guide on How to Budget on A Variable Income

There are a lot of perks that come with freelancing, but a stable, regular paycheck isn’t one of them. 

During my first year as a freelancer, I dealt with an inconsistent income roller-coaster: One month I’d stress about late client payments (and making rent), while the next month I’d find myself flush with cash. 

Indeed, when you don’t know how much you’ll make or when you’ll get paid in a given month, it’s difficult to get ahead financially. Currently, 20% of the workforce is freelance and that number is projected to rise to 50% within the next decade. And freelancers aren’t the only ones dealing with an inconsistent income. If you’re paid on commission or earn the lion’s share of your income on tips, you may be dealing with this roller-coaster as well.  

For me, I had to implement a budgeting system that helped me pay bills and save money for my financial goals. I found a system that works for me, and it can work for you, too. Read on to learn more about my tried-and-true budgeting system for an inconsistent income. 

How this budgeting system works — an overview

While your income may be irregular, most of your bills are not. Plus, one month you may live large because a client finally paid you while another month you can barely cover rent because things have been slow. 

To break this feast or famine cycle I nailed one goal: I pay myself first with a steady, consistent paycheck. Regardless of how much I earn each month, I still get paid the same amount. 

So, let’s say you’ve decided that your monthly paycheck needs to be $5,000. One month has been stellar, and after setting aside money for taxes, you’ve earned $7,500. Rather than spending that $7,500, you pay yourself $5,000. 

The next month has been a little rough and after taxes, you’ve only earned $3,500. You can still pay yourself first with a regular paycheck. See how that works?

While it may be a bummer to not spend a little extra during months when you earn a lot, you’ll be thankful that you didn’t blow your cash when a slow month rolls around. 

Steps to implement this system

The pay yourself first concept is pretty straight-forward. But, with any budgeting system, there are a few key steps you’ll want to take to implement this. 

Step 1: Calculate your budget

The first step is to figure out what your monthly paycheck will be. If you don’t have a budget already, start by listing all of your necessities. These are the things that you absolutely must be able to pay for each month, regardless of how much or how little you make. For example: 

  • How much do you spend on things like housing, transportation, utilities, groceries, and health insurance premiums? 
  • How much do you transfer into savings each month for retirement and other goals?
  • What are your debt payments? 

Next, you’ll add your discretionary spending to your budget. This includes things like eating out, shopping, subscription services, and any extra travel. Discretionary spending is nice but you can also cut it out when things get really lean. 

Not sure what you spend? Take some time to look back through your past few months of credit card and bank statements to get a good estimate. 

Once you have everything listed, add it all together. This will tell give you a ballpark idea of your monthly budget and monthly paycheck amount. 

Step 2: Set up separate bank accounts

To keep this system organized, you’ll want to have a few separate bank accounts set up, including accounts for:

  • Work income (or business) 
  • Personal spending 
  • Savings 

It’s a good idea to deposit your work income into a checking account that is only used for your work expenses (no personal spending). If you’re self-employed you might want to consider using a business checking account. 

Each month your “paycheck” will be transferred from your work checking account to your personal checking account. You’ll pay all of your bills and do all of your personal spending with the money in this personal account. 

You’ll also want to have a separate savings account that you can pull from during your down months. Dave Ramsey calls this savings account a “hill and valley fund”. When you have an exceptionally good month, you can transfer money from your work checking account to this savings account. And during an exceptionally bad month, you can transfer money from this savings account to cover your full paycheck. 

Step 3: Adjust as needed

Just like with any other budget, you can make changes periodically and check to see whether this system is working. If you find that you haven’t given yourself enough of a paycheck to comfortably live, go back to step 1 and recalculate your budget. If you find yourself constantly needing to dip into your savings account to give yourself a paycheck and that account balance is getting dangerously low, you may need to cut back on some of your expenses or earn more money. 

Set yourself up for success

If you have an inconsistent income, don’t fret. You can still enjoy the benefits of flexible earnings with a budget that works. 

While it can take some time to set up this system and get used to paying yourself a consistent income, you’ll eventually breathe a little easier each month. Besides, it’ll be nice not to worry about paying your bills when things get a little slow. Are you ready to give it a try?


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