Reviewing bills to find the savings
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Just like you wouldn’t skip paying your electric bill, putting money into savings helps create a plan for financial well-being. But where do you start? How much should you be budgeting?
Numerica Credit Union uses a model called, “Spend, Save, Share.” While everyone’s financial situation is different, this is an outline to where your money should be going. It shakes out to be spending about 70% of your income on needs, working towards saving 25% for both long term and emergency savings and then giving 5% back to help support the community.
Sounds great, but how do you even start to figure out if you are close to those numbers?
Monthly bills ripe for the picking.
If you’re like most of America, you pay your bills on auto pilot. With amazing tools like Bill Pay, recurring monthly bills are easily and conveniently deducted from your checking account. But when is the last time you added up and double checked those totals?
Now’s the time. Reviewing your bills can also help you find places to start saving. Even if it’s just a little bit, every penny, dime and dollar saved is one step closer to your financial goals – shameless plug for last month’s 12 months of savings: Setting SMART Goals.
So, let’s get started. The main objective is to go through your bills and find places where we can cut our spending and increase our savings. Our secondary goal is simply to become aware of what we spend on living every month.
- Gather all of your statements and invoices for every bill you pay each month and organize them alphabetically.
- Review each statement. Note: This is also a great time to double check for any fraudulent charges or if your balance is higher than it should be.
- Complete this worksheet with the name, amount due, and balance. As you complete the worksheet, take special notice of the “Potential Savings” box. Check the box if there is an opportunity for saving.
- Time to conquer those Potential Savings. Can enrolling in automatic payments reduce your payment? Maybe it’s time to reduce the premium cable package to something more basic? Or perhaps that eating out budget is a little too crazy. Look for the easy savings; next month we’ll dive more into areas to save.Line by line, add up the amount you can save – even if it’s just a few dollars here or there, they add up. Record your total savings.
- Woo hoo! Now, don’t just let that money fly away. You’ve already been spending this money so you aren’t going to miss it. Add it to your Numerica savings account!
Give yourself a pat on the back. You’ve navigated the path to understanding where your money is going, and you’ve figured out how to pay yourself instead of everyone else.
See you next month where we will have plenty of tips and tricks to save even more money!