2008 taught us many lessons- like not depending on a single income for the rest of our lives. We have come to realize that we have to constantly earn more and invest that money wisely to be able to afford a decent lifestyle when we are older. However, the road to investments goes via savings and Americans don’t usually have a good savings record.
Don’t worry, we have a solution for you. These small and simple steps will not just help you in creating a small emergency fund but would also be useful in changing your outlook towards money. Let’s get started.
Put a ban on expensive habits
Who doesn’t love to go out every weekend, splurging on expensive drinks, hoping to chill out with their friends or get a new date? However, this habit could be costing you a lot more than you can guess. Sit down this weekend to count how much money you spend on a night out. Some people also suggest that stopping your morning cup of joe from Starbucks will also help. Really? Count how much you spend on coffee from premium coffee chains each day. Do you think this is the kind of money you can easily save and transfer to your savings account instead?
Start keeping some money in growth assets
We have all heard about keeping our money in stocks and mutual funds to let it grow. However, this isn’t always necessary. If you are really looking for great returns, then you should divert some of your savings to volatile assets like Bitcoin as well. You can buy cryptocurrency from any crypto exchange and save it in Bitcoin wallet of the year. Buying and selling Bitcoin is very easy and it has generally higher returns as well. However, make sure that you invest the money that you are ready to lose. Cryptocurrency is still a new asset class and the prices can be highly volatile, giving high risk as well as high return.
Get rid of your loans
It is impossible for some people to start saving because they have a lot of loan payments to make. If you too face a debt crunch, then you must immediately start paying off your loans. Experts have suggested two methods to do this- debt avalanche and debt snowball. In the debt avalanche method, you will select the loan with the highest interest rate and try to pay it off in full as soon as possible. Once done, you will move to the next loan with the highest rate of interest.
The debt snowball method is relatively simpler and easier to maintain. In this method, you will find out the loan with the lowest due amount and pay it off in full each month. By doing so, you will be able to get of your loan repayments more quickly. It will also give you a bigger psychological advantage compared to the debt avalanche method.
Savings don’t have to be a series of small and painful steps. By adopting a smart method to save money and allowing it to grow, you could be making a lot of progress.