5 Easy Ways to Start Saving Money

5 Easy Ways for Parents to Start Saving Money

March 1, 2018

5 Easy Ways for Parents to Start Saving Money

5 Easy Ways for Parents to Start Saving Money
Saving money doesn’t have to be overwhelming for families. These little things can add up in a big way.5 Easy Ways for Parents to Start Saving Money

You learn a lot when you become a parent, from how to change diapers in the middle of night when you’re barely awake to how much you can love another human being. Another thing? Kids aren’t cheap.

Daily essentials like diapers and wipes add up (you’ll spend well over $600 on diapers alone during your little one’s first year!). As baby grows, they need more things, like a high chair, toys and bigger clothes. And then there are sticker-shock expenses, like childcare.

With all these new expenses, it can be hard not to laugh when people say things like “build an emergency fund” or “save for your retirement”!

Take a deep breath. You don’t have to be flush with cash to make a meaningful impact on your long-term finances. There are little things you can do to save money that can add up in a big way.

Here are some ideas:

Save your change: Stockpile your nickels, dimes and quarters in a jar, just like you did in your piggy bank when you were a kid. If you don’t like dealing with or don’t have much physical change lying around, there are apps that’ll do the same thing for you. Connect one to your bank account, and it’ll round up purchases to the nearest dollar. So if you spend $3.75 on a latte (no judgment!), they’ll round it up to $4 and drop that extra quarter into a savings or investment account.

Experiment with cash only: It can be really easy to overspend when you have debit cards or mobile payment apps at the ready. One tip? Try taking out a fixed amount of cash for your week’s budget and spend only that. Leave your card at home, delete the apps from the phone and resist the urge to swing by the ATM. This might force you to really think about your purchases before making them and learn to budget to make the cash last through the week.

That said, using a credit card to build your credit can be smart—as long as you do it wisely. Whenever possible, try to use plastic for only what you can afford to pay off in full each month.

Automatic transfers are your friend: Set it up so money is automatically taken out of your paycheck or checking account regularly (you can do this pretty easily through most banks). Transfer whatever you can afford—even $25 a paycheck is better than nothing. Move money into a savings account, a 401k or an IRA or put it toward payments for student loans or credit cards. Out of sight, out of mind.

One way to approach this: start with your family’s take-home pay. Subtract all your regular expenses—rent or mortgage, bills, transportation, childcare, groceries, etc.—see what’s left over and then figure out how much you can comfortably save.

There are also apps that will calculate how much money they think you can save every day based on your lifestyle. They then remove it from your account and stock it away in a savings account you can access any time.

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Uncover those hidden costs: Remember that video service you signed up for but never watch and still get billed for? Or the membership to the yoga studio you were so pumped about, but now that baby’s here, you never seem to have time to go to anymore?

Don’t throw that money away. Review your monthly bank and credit card statements to see what recurring subscription services you’re paying for and if they’re something you still value. Then set aside some time to cancel the ones you don’t, since many require you to call. Cutting these from your monthly expenses can add up.

Start investing: If investing seems too high roller for you, you might be in for a surprise. You don’t have to be part of the top 1 percent to be an investor. There are many online investment services that don’t require you to have thousands of dollars to start an account—and they’ll help find you plans that fit your financial goals and don’t charge crazy high fees. Again, even small regular contributions can add up in the long run (compound interest for the win!).

The takeaway? Even though you may feel like you have more expenses than ever now you’re a parent, you can still save. Little contributions can help you build your savings, especially if you do it regularly. And saving for the long term can help you focus more on your kiddo, and less on your bank accounts.

Saving money for the future is just one step you can take to financially protect your loved ones. Life insurance is another. Now you can crowdfund your life insurance policy premiums for the first year by adding it to your Babylist registry. Learn more here.

Article sponsored by The Prudential Insurance Company of America, Newark, NJ. This article is provided for your general information. Prudential and its representatives do not give legal or tax advice.

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