While these strategies work well on their own, achieving effectiveness in saving $1,000 requires discipline and the right combination
Let’s be honest: most of us use hundreds of excuses to save. “I don’t earn enough”, “I have a family/children to support”, “It’s impossible, it’s not enough for me”. The reality is that there are at least 5 effective strategies to save $1,000 dollars a month and that you put aside the justifications for why you don’t do it. If after reading this article, you can’t save even a few hundred dollars, we may be talking about laziness being greater than discipline.
While you may save a few bucks by doing just one of these strategies, to be honest, the suggestions here work better together than individually.
It is true that your income capacity will largely determine the effectiveness of reaching the goal, since you cannot save $1,000 dollars if that is what you generate per month. You would have to not eat, and that is impossible. However, as we’ve pointed out here at Just Money at other times, it’s better to save $100 or more than not at all.
1. The budget, the key to everything
While some can achieve their savings goal without budgeting, the vast majority should do so to achieve it.
How to make a budget? In Just Money we have explained different strategies for all tastes. They range from the most recognized, such as the 50/30/20 rule, to the strangest, such as the envelope strategy.
2. Settle your debts
No saving is really worth it if you’re riddled with debt, especially high-interest debt like credit cards. While the returns of the best savings accounts do not exceed 2% and an investment can even give you up to 12% in a good year (with the certain risk that this entails), nothing compares to the historical interest rates of the cards of credit that exceed 20%. Simply put, you can’t make any profit on your good intention to save if you have debt.
3. Put your savings in automatic mode
If you are one of those who say “I don’t have any money left to save at the end of the month”, then this strategy is for you. Nobody has money left over, except when you live paycheck to paycheck, which is why you should put your savings at the top of your list of needs, such as rent, the payment of your services and food, and set up an automatic transfer to your account of savings. By putting that money in a separate account, you won’t have tempting cash to spend on other things. If your income capacity allows it, we are sure you can save $1,000 a month.
4. Choose cheaper insurance
Looking for insurance can make a big difference. Every insurer is different and has its own unique way of setting rates. Insurance is very complex, which means that your rate with one company could be quite different from the rate with another. Instead of renewing your insurance every time you need to renew it, get some quotes from other companies. Insurance comparison websites make it easy to compare, so it should only take a few minutes to figure out if switching would save you money.
5. Set up an energy efficient home
It is true that installing solar panels or a heat pump is expensive, however, you will reap substantial savings in the long run, which could benefit you towards $1,000 in savings.
You may prefer to save more money in the short term. If that’s the case, you can go for a much simpler option, like using caulk to seal the air ducts. According to the EPA, this project takes 1-2 hours to complete, $3-$30, and is easy to do. Best of all, it can save you 10-20% each year on energy costs.
Also, in the next few years, the Joe Biden administration’s recently passed Reducing Inflation Act, the federal tax credit would allow you to deduct 30% of the cost of installing solar panels from your federal taxes, in the case of cost average, a return of $8,580, which would leave the installation cost at just $20,020, on average.
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