How to Save More Money This Year

I think it’s safe to say we all are looking for ways to save and earn more money this year. The recession has come and gone and we’ve all had a reality check about our financial health. It’s time to set our sights on our major financial goals and make them happen. Many young 20-somethings like me are looking at major milestones like a trip out of the country or a wedding? I talked with Sara Margulis, CEO and Co-Founder of HoneyFund and Plumfund. She has some serious tips to get you meeting your goals this year…

1. What are some areas that people should stop spending money on when saving for a special moment in life like a wedding, retirement or buying a home?

Budgeting for a big event like a wedding, for example, is easy if you have time to plan and save. First, figure out how much you want to spend on the event.  If you have some money already set aside, subtract your savings from your budget. That’s how much you still need to save, or your savings goal. Divide the savings goal by the number of months to the event. That’s your monthly savings goal. You can ask your employer to divert that amount from your paycheck each month. 

Since you’ll now have less money coming in for living expenses, you may need to adjust your daily spending habits. The easiest and most impactful thing to cut out is daily expenses like morning coffee and eating lunch out. Avoiding Starbucks + bringing your lunch to work 5 days a week should net you about $80-100/week!

Instead, make your coffee at home and cook extra at dinner so you have lunch the next day already packed. If you limit dinners out to once each week, you can save another $100/week or more, depending on how often you currently eat out.

2. Let’s talk savings when it comes to preparing for a special life occasion. How much of a paycheck should be saved each month if the special occasion is one to two years away?

This wildly varies due to your lifestyle, the event budget, and the amount you already have saved. Use my savings goal calculator I detailed above to figure out the monthly amount you should save for your event.

3. What’s the deal with credit cards? Are they a great tool to use when spending money for the special occasion? For example, should credit cards be used to pay for a wedding venue and other vendors?

Credit cards can be risky when paying for a big event like a wedding. You want to be extremely careful not to start your marriage with a huge credit card bill you can’t pay off! Once you have your budget and your savings plan, and have committed to not spending beyond your means, you can use credit cards to earn rewards that can help cut the cost of your event. For example, you can pay vendors or big wedding expenses on a credit card to earn miles toward your honeymoon airfare. Be sure to pay the balance each month from your event savings to avoid interest charges.

4. What are the best apps to help you save money? Do you suggest any apps that make saving money fun?

I love MINT because it helps you visualize all your accounts, and your spending habits.  But the best “app” can’t help you if you don’t have a good old-fashioned budget and a commitment to sticking to it. Once you have that, a good app should make it easier to see how much you already have, and how much you’re spending and saving each month. Some apps also offer rebates, cash back or other savings on things you buy every day, but be careful not to end up spending more just to get a few dollars in “savings.”

5. What is something I should invest in or save on now that I’m a mid-twenty something?

Your mid-twenties is the best time to start your retirement account. You have time on your side more so now than any other time in your life, which means you will get the maximum benefit from compounding, or the ability to earn more money on the earnings in your account. It’s also the time in adulthood when you are likely to have the fewest expenses — before you have a home mortgage, multiple cars, children, etc. That’s why you should max your contribution to your 401(k) now, especially if your employer has a matching program. The compounding factor plus maxing out employer matching is two opportunities for free money you may not have any other time in your life!

6. How can I MAKE more money in 2016? Is it all about savings?

Earning more income is a great strategy to help you meet savings goals and set yourself up for a solid financial future. Take some time to do a career checkup. Ask yourself these questions: Are you in a job with upward mobility? Maybe it’s time to ask your employer about a promotion. Even if you aren’t ready now, what are some things you could be doing this year to set yourself for a promotion later on? Are you due for a raise? If so, don’t be afraid to ask your employer — it often won’t come unless you ask. 

If you have some savings outside your retirement account, look around for some investments that can earn more money on your money. Savings interest rates are at historic lows so you might need to think outside the typical savings account. One example is a peer-to-peer lending programs like Prosper.com, which can return 6% or better depending on your risk tolerance.

7. Any advice for creating a savings for newlyweds?

Once you’re married and you’ve successfully navigated budgeting, saving and paying for your own wedding together (see above), you should be in a great position to budget and save for any big expenses! When opening a new savings account, look for cash offers from banks that can help you start off with a few hundred dollars, free!

Once you have the savings account set up, it’s all about agreeing on the goals and working together toward them. Review your expenses together every month or two to make sure you’re on track to hit your goals. REPEAT AFTER ME: REVIEW YOUR EXPENSES TOGETHER REGULARLY. This is the top thing you can do to ensure you don’t end up like 45% of couples who divorce over financial disputes, so make it fun and make it count. One thing Josh and I do is open a bottle of wine and get out our favorite board game, so when our financial chat is over we have some fun waiting for us. If you have any trouble talking about money, agreeing on how to spend/save it, or actually sticking to your plan, seek help immediately. Sometimes all you need is a good book like the classic “9 Steps to Financial Freedom” by Suze Orman. And sometimes you’ll need a professional financial planner or marriage counselor. Either way, get support to help get back on track. 

8. How can Honeyfund/Plumfund help me with savings when I am hitting a milestone in my life (i.e. getting married, staring a family, buying a house, facing an unexpected incident etc..)

Honeyfund and Plumfund can help you stick to your budget by inviting friends and family to support your goal as a gift.  Want that once-in-a-lifetime honeymoon but it doesn’t fit your budget? Create a honeyfund for friends/family to give you a luxury honeymoon experience as a wedding gift. Turning 30 and always wanted to start that business or buy that first home? A Plumfund birthday fund can offer friends and family, near and far, a chance to be part of making your dream happen.  Even when life brings you unexpected hardships, friends and family will want to support you and Plumfund gives them a place to do it. Both sites offer 100% free options as well as the lowest processing fees in the crowdfunding industry. Both sites are built on 10 years personal gifting and etiquette experience, so giving feels good and contributors are never charged a fee.

What are you saving for? Have you tried Plumfund for your next big adventure? Hmm… I think Paris is calling my name.

Thinking about HoneyFund for your wedding?