Save more when you’re already behind

Last week I touched on some of my top suggestions for recovering your finances next year. A major component of that is savings. If you’re able to get out of credit card debt, any number of emergencies or financial conundrums can occur that put you right back at square one.

The number one reported reason is medical expenses. That’s why it’s so critical to have an emergency savings.

According to iQuanti, there were roughly 16 million Google searches on “spending less and saving more” last year alone. 16 million! It also turns out that this is consistently a top five New Year’s resolution every year. But if you’re digging yourself out of a financial hole, what are the best ways to save?

I asked Rance Carlson, a financial adviser and certified financial planner with CommunityAmerica Financial Solutions, what he suggests to his clients when they are trying to improve their financial situation.

“The first thing I suggest is to take advantage of free money,” Carlson said. “If your employer offers a 401(k) match, make sure you are contributing at least enough in order to maximize the match they will make. Likewise, Health Savings Accounts (HSAs) are slowly becoming more popular with employers.”

This combats unexpected medical expenses, and provides a long-term nest egg.

I also asked him about being in a pinch and needing money right away.

“When a couple comes to me about short-term cash flow problems, I immediately ask them how much they spend on food per month. Food is the third biggest monthly expenditure behind housing and transportation for the average American, but it is the one of the most flexible as well.”

According to the National Labor Bureau of Statistics, a family of four spends $1,000 per month on food and approximately 25 percent of that goes toward eating out. He suggests trying a new grocer, using coupons or cooking simpler meals that don’t require expensive ingredients like fresh herbs. Most importantly, eat out less frequently.

One of our employees recently did a total cost comparison of the weekly grocery list shopping at a low-priced grocery store. The individual’s savings was $50 in just one outing. If you go weekly, that’s $200 per month.

Rance’s final point was this: “I’ve never had a couple come back to me and complain that they paid down their debt too fast or saved too much.”

I couldn’t agree more.

Join the movement and get your savings account in good shape in 2018.

This story was originally published December 13, 2017 at 5:24 PM with the headline "Save more when you’re already behind."