We all realized the importance of having an emergency fund last year when COVID-19 hit, but building up your savings can be a daunting task -- especially when money is tight.
“Savings is, I feel like always a struggle,” Lowell resident Timna Nwokeji said.
Sarah Wall of Whitman agrees.
"It’s really hard to save money with four kids, it’s really hard!” she said.
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Most of us can relate, but certified financial planner Jennifer Lane, President of Compass Planning Associates, says anything is better than nothing, and a couple of dollars here and there can put you on the path to saving success.
“Money always runs in it’s kind of a flow,” Lane said. “ It keeps going where you send it. If you’re always putting money on the credit card and struggling to pay it off, nowhere in that flow is savings. So by setting up a savings stream, even if it's small, it will always be there.”
“I’ve learned through all my years of financial planning that there is no relationship between or very little relationship between how much you make and how much you have,” Lane continued. “So the people who pay attention, I have clients with thousands and thousands and thousands of dollars in paychecks. They have no savings and tons of credit card debt. And I have clients who you think, my goodness, how do you make it from one week to the next and they have nice savings. Huge IRA accounts and they are ready to retire. So it’s all having it on your radar and starting small and keeping with it and accepting the setbacks."
Lane added, "Things will happen and you’ll have to take money out of your savings account to pay for that emergency. But if you’ve got that drip going and it's money going back into that account, it will start to grow again.”
Lane challenges her clients to find the snowflakes -- or little savings that accumulate quickly.
“Start putting a little bit into your savings account, no matter how much it is and look for the expenses you don’t want or need anymore,” said Lane. “ If you cancel a subscription that you don’t need, suddenly you have three, five, ten, fifteen, twenty, fifty dollars a month that you can put in your snowflake account.”
Lane says if you make a change that saves you money, direct it into your savings account.
“I’m going to go to Starbucks for coffee or Dunkin once a week instead of twice a week or once a day instead of twice a day,” Lane said. “That’s a snowflake and make sure you move it from checking to savings and eventually it will be from savings to investments and you’re up and running. Be intentional about making the savings.”
Here are some other snowflake ideas to jumpstart your savings:
- Use a personal finance tracking app to see exactly where your money is going.
- Save a few dollars with coupons at the grocery store? Immediately transfer that money into your savings.
- Cash in your coin jars.
- Cook at home more.
- Skip the bottled water.
- Buy generics at the grocery store.
- Take advantage of rewards programs.
- Shop around to get a better deal on insurance or wireless plans.
- Set up an automatic deposit into your savings account.
- Or think long term and turn down the thermostat and turn off the lights when they aren’t in use.
“I had one client who was so fun, who decided for the whole one quarter to unplug everything in his house when he left,” Lane said. “It was a lot of work, but it was exciting to see how his electric bill changed just because things were not always sitting there drawing on, all of the stuff that we plug in is drawing a current and going on the electric bill.”
In the end, Lane says that client was able to cut his bill down dramatically. Small savings do add up.
Making a list, using coupons and looking for sales at the grocery store could save you an average of $25 a week.
Cutting back on takeout, fast food, pizza, donut or coffee runs, could save another $20 weekly.
Cancelling subscriptions or memberships that you’re not using, could free up another $30.
Direct all of that money into your savings account over five months, and you’ve saved $1,000!
We asked two women -- Timna Nwokeji and Sarah Wall -- to take the snowflake saving challenge during the month of February.
Nwokeji is a blogger at lifeasamaven.com and works in HR, while Wall is a mother of two sets of elementary age twins and a substitute teacher.
“I’m super excited to join and be part of it,” Nwokeji said.
”I’m actually really pumped for this,” Wall added. “I think it’s going to be a really good challenge!”
We gave them some guidance, and checked in with them several times over the course of a month to see if they were finding savings.
“I did a couple of things this past week to hone in on some savings opportunities. I downloaded a budget app. I’m still learning how to navigate it and use it but that so far is helping to pick up on some things I might miss in my normal budgeting,” said Nwokeji. “During the week we’ve been trying to cut down on take out, so, saving an extra $30 there. “
“I went through the other night and found several apps that I’ve been paying for and had no idea,” said Wall. “One I think the kids ordered by accident and I just had no clue.”
“I switched to three days a week doing all coffee at home,” said Nwokeji. “So, I made a rough estimate that I’m saving five bucks a day from that, and that was an extra $45 a month.”
Wall saved $37 in coupons during a grocery run at a warehouse club store. Nwokeji cancelled two gym memberships that she and her husband hadn’t been using.
At the end of the month, after cancelling unused subscriptions and memberships, and making coffee at home, Nwokeji had diverted $113.84 into her savings.
“I’m going to just make it more permanent,” she said. “’I’ll just automatically deposit it every month. That way I don’t lose sight of those savings.”
She also finally sent in her receipts to cash in on a mind and body incentive offered by her employer. She plans to put that $300 directly into her savings, as well.
As for Wall, she cancelled subscriptions, clipped coupons, cashed in some scratch tickets that were laying around, skipped coffee runs, sold some items online and came up with $279.32.
She now realizes that a little bit of planning can save her a lot of money on her weekly grocery bill.
“My first thing would be go shopping alone, that saves a lot of money and I’ve been better about looking at the flyers before I go,” she said. “I have been more mindful of thinking before I go to the store, what am I going to make this week? What do I need to make this?”
“At the beginning it was a little tough to get into it,” she added. “But once I started doing it, I didn’t want to stop because I was like, wow, this is really, these small amounts do add up and you kind of see a difference in just a short amount of time.”
Lane says, “Money is a head game right? Everything about money is emotional. Once you’re willing to accept the fact that no amount is too small…you’ll start to see savings everywhere!"
We challenge you to take the NBC Savings Challenge and look for snowflake saving opportunities in your own life! If you do, keep us updated on your progress and share your money saving tips.