We’ve all been through tough times where we find it hard to scrape by. In today’s economy, it can be a serious struggle to pay bills, make rent, save for retirement, and set aside a nest egg for a rainy day. Although there are several reasons why it’s harder for the average joe to make ends meet, one of the root causes is poor money management.
Face it, to make it in this economy you need to know how to hustle, plan, and save, even if it’s only a few bucks here and there. While it may sound tedious to some, you cannot achieve financial freedom unless you’re willing to play the long game and develop a calculated, reasonable savings plan.
To help you develop a step-by-step plan to financial independence, we put together this five-point guide to start saving money today.
1: Grow Your Side Hustle
Whether online or offline, you can make money fast by working one of the many lucrative part-time side hustles. If you can’t negotiate a raise at your full-time job, chances are you will have to start chipping away at a side job in your spare time.
While this may sound like a chore to some, those who work side jobs often prefer their side gig over the full-time job that pays the bills. This is because side jobs offer workers more freedom than your typical nine-to-five.
For example, popular ride-sharing jobs like Uber or Lyft driving allow workers to set their own hours, never wait around for a paycheck, and never have to deal with a nagging boss. With a side hustle, you are the boss! Working a side job on weekends and evenings extends beyond ride-sharing apps, too.
Here are a few of the most popular side jobs for those trying to save money fast without having to hand in a resume or sit through tedious interviews:
- Task Rabbit (Freelance Labor)
- Instacart (Grocery Delivery)
- com (Home Care)
- Uber Eats (Food Delivery)
- Survey Junkie (Online Surveys)
- Upwork (Freelancing)
- Amazon Affiliates (Affiliate Marketing)
2: Build an Emergency Fund
Every responsible savings plan needs to include an emergency fund. These funds should be set aside as a reserve supply of money in case of an emergency, surprise bill, or the loss of a job. No matter which financial planner you talk to, they will probably recommend you start saving for an emergency fund, since you always want to be prepared for the worst.
Ideally, an emergency fund will hold no less than three months’ worth of savings. In other words, the fund should hold enough money to pay your bills and get you by without the bill collectors knocking on your door for roughly 12 weeks. This gives you enough of a buffer period to find a new job and get back on your feet without dipping into your main savings fund.
3: Create a SMART Savings Plan
If you are looking for ways to save money and boost your savings, you will need to create goals that are attainable. To succeed in saving money, you must be realistic and practical with the amount you decide to set aside every week or month.
The goals you set for yourself must be actionable. In other words, you won’t get away with setting pie-in-the-sky goals that you will never stick to. Instead, set SMART goals, which refers to an acronym coined in 1981 by George T. Doran, a former director of planning for the Washington Water Power Company.
The acronym “SMART” stands for Specific, Measurable, Achievable, Relevant, and Time-bound. Together, these principles make up the bedrock of any successful savings plan. Therefore, you will need to be specific about how much you will save (i.e., $750 monthly), measure how much you’re saving so you’re on track (about $187.50 weekly) and make sure you stick to your deadlines.
Many of the best wealth management resources online will tell you the same thing: SMART savings goals start with asking yourself the right questions. Don’t set a wishy-washy, low-ball goal like “I want to pay down my debts.” Instead, make your goal SMART by changing it to “I want to pay off all my debts to a $0 balance by December 31st.”
4: Reduce Your Expenses
If you cannot add to your income, you will need to cut back on expenses to save money. The best way to do this is to start by writing down all your recurring expenses and organize them on paper. When you do this, you will be able to see which expenses are non-essential (such as, say, Netflix or Amazon Prime) and which ones are (like car insurance).
The trick is to not be too stingy. If you love coffee, you don’t have to cut it out entirely. Instead, nix the takeout coffees and start brewing at home. If you love shopping, try hitting up thrift stores more often instead of department stores.
5: Start Collecting Perks and Rewards
These days, just about every retailer from major chain stores to local mom and pop shops have customer loyalty programs that you can opt-in to. A great place to start is with gas stations since top gas retailers like BP, Exxon Mobil, and Shell all offer customer rewards programs that can save you up to 20 cents on the gallon when you fill up.
The same is true of credit cards. When shopping for your next card, look for cards that offer cash back perks so you can receive a portion of your purchase back in cash that can be directly deposited into your savings account.
Hustle Your Way to Financial Freedom
When it comes to finding ways to save money and boost your savings, you need to get a little creative. Whether you want to achieve debt freedom or take that around-the-world vacation you’ve always dreamed of but could never afford—you need to get realistic and specific about your savings goals and get your hands a little dirty pinching pennies and cutting costs.