Feeling stressed about your lack of savings and want to build a nest egg quickly? Whether you need to come up with a lot of money for a big purchase — like an awesome summer vacation or a new fridge — there are tons of reasons why you may want to save a lot of money fast.
Just be clear on why you're saving. "It always starts with the destination," certified financial planner Michael P. Miller told Business Insider. "Your goals dictate the strategy and resources required to accomplish them."
Once you have a goal in mind, take these five steps to get on the fast track towards amassing the cash you need.
1. Go after the whales, not the minnows.
A lot of money-saving advice focuses on small lifestyle changes that make a real difference over time. Cutting out your daily coffee, brown-bagging your lunch instead of buying it and lowering your cable bill can put a big overall dent in your expenses, allowing you to save those funds instead.
But when you need to save money fast, skipping a $5 daily lunch will only get you so far. "To save a lot of money, you should optimize big expenses instead of cutting every small expense," NerdWallet recommended. For most people that means housing, food and transportation.
If you drive to work, talk to your coworkers about carpooling or look into bus routes in your area. If you take public transportation, consider walking or biking to work instead. Can you find a roommate to help with rent or post your house on Airbnb so your home can earn you some extra money? Is it possible to give up eating at restaurants and to start using coupons? Could you split a warehouse membership with a friend to save 61% on common household items?
2. Go retro with your spending.
Building credit is important, especially if you want to have and use a credit card. However, if you're having a short-term budget crunch and want to save money fast, consider paying the old-fashioned way: go on a cash-only diet. Consumers who carried a balance on their credit card lowered their total debt by an average of $104 when they received reminders to use cash for purchases under $20, according to a 2016 report published by the Urban Institute.
Not only can using cash force you to be more in touch with what you're spending, but it can also help make it impossible for you to overspend. If you normally spend $100 a week on groceries, take $50 to the grocery store and leave the plastic at home. If you somehow blow through $20 a day at work on coffees, lunches and snacks, bring only $5 for the day.
The payoff can be huge. "We spent $1,500 to $2,000 a month less when we started using cash," Dave Fernandez, certified financial planner and founder of Wealth Engineering LLC, told Bankrate. "[Having to part with real money] just makes you think twice about it."
3. Go cold turkey and shock the system.
If you're ready to get extreme, go cold turkey and stop spending money on anything that isn't a true necessity. "If you ever need to shock your savings back into shape, a no-spend month can do the trick," Bankrate's Lance Davis wrote.
To start your no-spend month, set ground rules for what you're allowed to buy. Rent and essential bills are obviously on the list, and you'll need some kind of transportation. Beyond that, groceries should really be your only purchase — though you should eat what's in your pantry first and definitely refrain from eating out.
A no-spend month can force you to adopt habits you may continue even after the month is up. "In the end, you'll be rewarded with a big(ger) chunk of money than you usually have, plus tons of pride and self-sufficiency," Samantha Leal wrote of her no-spend month in Marie Claire.
If something breaks during the experiment, repurpose other items or look for an alternative on websites like Freecycle. Opt for free activities when spending time with family and friends, like visiting a museum on an admission-free day, taking a walk or watching a movie you borrowed from the library.
4. Do the (side) hustle.
If you really need to save, cutting spending isn't enough. "A frugal-only perspective to building wealth is not going to take anyone very far," Harlan Landes wrote for Forbes. The problem with focusing solely on cutting costs is you'll eventually run out of things to cut.
"After you’ve cut to the bone, there’s nothing left to trim," J.D. Roth wrote at Get Rich Slowly. "On the other hand, your income potential is unlimited." To get started, ask your boss if you can work overtime or look for a side hustle in addition to your regular job.
Drive for a ride-sharing company, babysit or tutor kids, walk your neighbor's dog and take advantage of programs that allow you to make money quickly — and almost effortlessly — by looking at emails or displaying ads on your phone.
5. Turn trash into cash.
Another way to bring in more money is by selling things you no longer need. Look for designer clothes you don't wear, electronics you aren't using, old books or anything else you can put up for sale on eBay or Craigslist. Know what your stuff is worth so you get a fair price, and stay safe by following best practices, like meeting buyers in a public place.
If you don't have a lot to sell, consider buying stuff and reselling it at a higher price. Books, picture frames, video games and brand-name clothing are among the items Money Crashers identified as good for flipping. Check prices online first to make sure you'll turn a profit, and be ready to clean up items so they look their best and fetch the highest prices.
By depositing your profits into a savings account — along with all the cash you've earned by working extra gigs — and watch your bank account grow faster than you ever imagined possible.
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