The local economy is booming, yet nearly a quarter of Americans have no savings at all. Nearly 22% only have modest savings, but not enough to cover three months of expenses. Just 29% of us could cover six months of expenses with our savings, as financial experts recommend. Whether you’re starting from scratch or want to grow your savings in 2019, these financial tips can help.
Make Zero-Spend Days Part of Your Routine
Image via Flickr by free pictures of money
Spending money, rather than saving it, can become a habit. Before long we can’t imagine getting through the day without a café latte or lunch at our favorite restaurant. New York personal finance blogger David broke the habit by developing a new one: zero spend days.
Each week David has at least one zero-spend day, where he avoids spending any money at all. He’s recorded his progress on his blog Zero Day Finance, and the results are staggering. He cut his monthly spending from $4,700 to $3,170, boosting his savings by $18,432 within the first six months of his challenge. If David can save so much in pricey New York City, just think how much this strategy could save you?
Repay Tax Debts
Tax debts will be even more costly in 2019 after the IRS increased its interest rates last April. The IRS now charges 5% for individual underpayments. If you’re a business owner with IRS debts, that rate changed to 7%. This interest rate compounds daily, so your debt can add up quickly over time. You could also face additional payments for late payments and filings on top of those interest rates.
Repaying your IRS debt in full is the easiest way to avoid those inflated charges. Even a partial payment can ease some of the sting. The IRS also grants extensions and exemptions in some circumstances. Its installment agreements and Offer in Compromise initiative can also help qualifying Americans save. Speak to a tax professional to determine the best way to handle your tax debt.
Don’t Fall for Convenience
The modern world is full of conveniences. We needn’t cook; we can order in. Someone else can maintain our yard, clean our house, and even make our coffee. We don’t even have to walk or drive anymore, because our Uber driver takes us where we want to go. All these conveniences make our life easier in the short term, but they can derail our savings efforts, according to money expert Suze Orman.
“Stop leasing cars, stop eating out, stop doing the things that’s wasting your money and makes your life easier, because in the long run it’s going to make it harder,” she said during CNBC’s Power Lunch.
Make 2019 the year you stop outsourcing, and take greater control over your household and habits. Those conveniences seem inexpensive, but they really add up.
Experts say most Americans don’t save money because they don’t prioritize it. However, saving money provides peace of mind and financial freedom. With a savings plan in place, you can weather financial crises and feel confident treating yourself to life’s indulgences. Follow these savings strategies to grow your nest egg in 2019.