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Saving money isn’t a matter of math. The secret to saving money is a matter of priorities.
You won’t save money when you get that next raise. You won’t save money when that car is paid off. You won’t save money when the kids are grown.
You’ll start saving money when your future needs become more important than your current wants.
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Why Americans Aren’t Saving Money
We all know we need to save, but most people don’t save like they know they should. In fact, a shocking Federal Reserve survey revealed that nearly half of Americans couldn’t cover a $400 emergency without borrowing money or selling something. Why? Because they have competing goals.
The goal to save money isn’t a big enough priority to delay the purchase of that pizza, DVD player, computer or kitchen table. So we purchase, buy and consume all our dollars away or, worse yet, go into debt to buy these things. That debt then becomes monthly payments that control our paychecks and our lives.
So What Is the Secret to Saving Money?
But you can stop the cycle of living paycheck to paycheck with a simple secret: Make a zero-based budget before the month begins. A budget is all about intentionality. It’s the best way to know how much money you’re currently spending. And it helps you create a plan for saving your money before it starts flying out the door.
What Is a Zero-Based Budget
A zero-based budget is simply when your income minus your outgo equals zero. You’re giving every dollar a name—or assigning it a job to do—before you save or spend it. Down to the last penny.
Start with your most important categories first, like giving, housing, food, clothing, insurance and bills. Then, fill in the rest of your budget with your leftover cash. That way you don’t run out of money before you even start saving. When you save first, your money stays where it’s supposed to!
Budgeting Doesn’t Have to Be Hard
Making a budget is easy with Dave’s favorite budget app, EveryDollar. It only takes about 10 minutes to set up your money plan. And you can even track your transactions on the go, which makes sticking to your budget way easier.
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The hardest part of budgeting is finding a few minutes each month to actually make your budget. Life gets busy, after all! But the great thing about EveryDollar is that it saves you time by replicating your budget from the previous month. That way, all you have to do is make some minor adjustments (for that birthday gift or travel plan) and you’re good to go!
Why Budgeting Is Our #1 Tip to Save Money
When you make a zero-based budget, you’re effectively saying: “I chose to put my future needs before my present wants.” You see, it doesn’t matter how much money you make—it matters how you spend the money you make. Saving money has to be at the top of your priority list (and the top of your budget) before you’ll gain any real traction with your goals.
Whether you’re saving for college tuition, plane tickets to a family reunion, new school clothes for the kids, retirement or anything else, start now by making your zero-based budget before the next month begins. It’s never too late to take control of your money!
Now that the secret’s out, it’s time to get started on reaching your savings goals.
Sign up for your free trial of EveryDollar Plus! It makes keeping up with your money a cinch by connecting to your bank account and uploading all your transactions. All you have to do is drag drop, and you’re done!