5 Things to Do When You Have Zero Savings

It is not easy to save money on the regular but it is an important habit to develop. Your savings will allow you to cover unexpected expenses, pay off your debt, buy a home, and fund your retirement. It does not matter if you have zero savings now. Follow the tips below to create a nest egg beginning today.

  1. Start budgeting.

A budget will quickly point out why you lack savings. Do you have an income or spending problem? Maybe you do not make enough to cover your basic needs or it can also be that you spend money without thought. Budgeting will show you where your money goes and how to take control of it.

  1. Create an emergency fund.

As the name implies, the idea is to rely on this fund to pay for unexpected bills and expenses. If you still carry debt, aim to save a month’s worth of expenses for your emergency fund. If this is still too much, try to save $1,000 on your bank account.

  1. Pay off your debt.

Any amount you use to pay interest is money that could have gone to your savings. Set up a debt payment plan and put all available money towards paying your debt every month. The sacrifices that you make in your budget will be worth it.

  1. Take advantage of small ways to save money.

There are opportunities to save money every day. Buy less at the grocery store, skip the designer coffee, switch plans and providers with your insurance or cellphone plan, and limit the amount you spend on entertainment. You can even turn it into a game and play against yourself – start by reducing $100 each month on every category you spend at!

  1. Prioritize your savings.

Having clear goals regarding your savings makes it easier. Maybe you want to buy a home, take a vacation, or invest in stocks. It always helps to know where you want your money to go because it will keep you motivated to make savings a habit.

Ian Schindler