Rani Jarkas Advices Five Really Obvious Ways to Save Money Better Than You Did
Rising costs of living have made it more challenging to save up these days. Saving money might even seem daunting at first, and you may have even lapsed due to some situations and emergencies. But certified financial advisors like Rani Jarkas agree that it’s never too late to make changes and start saving now. Here are some ways to improve your saving habits.
1. Conquer FOMO
Fear of missing out can make you more prone to lifestyle inflation, which occurs when you perceive former luxuries as necessities. Social media can make you want to keep up with others, and by combining FOMO with an ‘I deserve this’ mentality, you could spend your earnings on things that only provide short-term status and fulfillment.
2. Have an emergency fund
Emergency savings can offer some financial buffer if you suddenly get sick, become unemployed, or have unexpected bills to pay. An ample emergency fund can prevent increasing debt. An experienced financial advisor like Rani Jarkas can help determine how much you should set aside based on your situation and needs. In general, single people must set aside six months of expenses, and a working couple must consider at least three months.
3. Start saving for retirement now
Some people delay retirement planning, which is about finding a balance between having enough money for current needs and putting some cash aside for later. Seasoned financial advisors like Rani Jarkas warn that delaying retirement savings could cost you more down the line.
Starting early can put you at a good start as it lets you take advantage of compound interest, which can exponentially grow even modest savings. For instance, if you start saving $100 every month from age 25, it could grow to around $150,000 when you’re 65 with a five percent rate of return. But if you wait until you are 35 to start, you could get only over half as much money when you retire.
4. Take advantage of company-matched 401K accounts
When an employer matches your 401k contributions, they contribute a certain amount to your retirement savings based on your annual contribution. It can depend on your employer’s 401(k) plan’s terms, but they may match your contributions in many ways.
According to Rani Jarkas, most employers match a percentage of an employee’s contribution up to a certain portion of the total salary. They may also consider matching employee contributions up to a particular dollar amount, regardless of compensation.
5. Put a certain percentage of every paycheck into your savings account
Consider opening another savings account where you can directly deposit a certain percentage of your paycheck every payday. Prioritize putting money into that account whenever you get paid so you don’t miss anything.
