Saving 101 | Why you should save, and how to get started

Published: Wednesday, December 13, 2017 @ 6:13 PM

When you start making money, the last thing you probably want to do is save it — despite having probably been told at some point or another that saving is important.

Even if you’ve been making money for a while, there just may not be “enough room” in the monthly budget for savings.

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So a lot of people put it off, thinking they can always “save later.”

But that’s a very dangerous mindset to have — and the sooner you figure that out, the less damage it can cause.

Let’s get something else out of the way: saving money does not mean you’re cheap, and it does not mean you have to deprive yourself.

When you’re young, you can have just as much fun and save money at the same time. Wasting a little bit of money here and there is one thing, but a routine that involves knowingly wasting most of your money is just dumb — unless you have so much that you will never run out (which isn’t even the case for people who win the lottery).

Saving money is just about being smart – and while it may require some changes, changing a few things about the way you live now can drastically improve the way you live later. And change isn’t necessarily a bad thing, because some day, you will want more than what a wasteful spending routine has to offer.

In the real world, there is no “perfect” time for anything and no one ever really “figures their life out.” If you want something, you just have to start taking steps to make it happen. Because you know what, no one else is going to do it for you.

Why you need to start saving

How often do you reach the end of the month and realize you spent the money you had planned to save?

Nearly half of Americans are living paycheck-to-paycheck — and many of them are making a good salary. But without any idea of what they’re actually spending on, many people end up wasting a lot of the money they could be saving, and on top of that, they rack up big credit card debt just to maintain their current lifestyle.

A recent survey asked Americans how they would pay for a $500 unexpected expense — and 46 percent of people said they would have to borrow the money or use a credit card to cover it.

And according to Bankrate, “More than four in 10 Americans either experienced a major unexpected expense over the past 12 months or had an immediate family member who did. … This proves that an emergency savings cushion is more than just a personal finance cliché, yet most Americans are ill-prepared for life’s inevitable curveballs.”

There’s a lot of talk out there about why people should enjoy the money they have, rather than save it. But here’s the thing, it doesn’t have to be one way or the other — you can do both.

Of course you should enjoy the money you make — to a point — but if you continue to spend everything you have, you’ll never be able to do the bigger things in life you have planned. Unexpected expenses will always come up, and if you’re forced to put them on a credit card, $500 here and there can easily spiral into thousands of dollars of debt.

If you prepare for unexpected financial shocks, it will prevent you from sacrificing your other goals in life.

The ultimate goal of saving money is financial freedom — the ability to make your own decisions when you want to make them, without having to rely on someone or something else.

Money may not be able to buy you happiness, but it can buy you freedom. And that’s just as powerful as anything else in this life.

How to start saving money

People put off saving for a variety of reasons — maybe there just simply isn’t enough money in the budget or maybe you feel like you have a good handle on your money for the time being. Not good enough. There is always room in the budget – you just have to prioritize things.

Here 5 things you need to know to start saving more money and keep yourself on track:

1. Set goals

The first step to saving more money is figuring out why you’re doing it because if you don’t, then it will likely get put on the back-burner.

If you aren’t quite sure what your goals are, that’s OK. Just start thinking about what’s important to you — both now and down the road — so you can start prioritizing your spending and your saving.

Here are a few goals to consider:

  • Emergency savings
  • Rainy day fund
  • Paying off debt: The longer you owe money, the less you can save for your own goals in life.
  • Buying a car
  • Buying a house
  • Retirement savings

Everyone’s goals are different, so these are just a few things to keep in mind when you start thinking about why you’re saving. Even if these things are 3, 5 or 10 years down the road, you need to start thinking about them now to make sure you’re on track to reach each goal, when you want to reach it.

Getting to the point when you’re ready to buy a house and realizing you’re nowhere near as financially prepared as you need to be – that’s not a fun situation to be in. Saving for future goals can be difficult, especially when you can’t quite see the light at the end of the tunnel, but you will – and the only way you will is by making the decision to get started.

So identify what your big goals are and then start taking steps to reach them!

2. Make a plan: Figure out how much money you should set aside each month for each goal

Once you know what your goals are, you need to figure out how much money you’ll need for each of them. It doesn’t have to be an exact number, but having a rough estimate can help you figure out how much you should be putting toward each goal every month.

It’s also important to prioritize your goals. Start by setting aside more money each month for the most important immediate goals, while still saving for the others. And then as you build up each fund, you can start putting more money toward your longer-term goals.

Let’s look at a few of the examples from above.

Emergency savings: Bottom line: shit happens, and if you don’t prepare for it, you’re just shooting yourself in the foot.

Saving for an emergency should be an immediate priority. When you’re forced to put unexpected expenses on a credit card, it just sets you back even further and prevents you from making progress on all of your bigger savings goals.

The best way to save for unexpected financial shocks is to have two separate emergency funds: a rainy day fund and an emergency fund. A rainy day fund is cash you can dip into for an unexpected expense, while an emergency fund is a bigger sum of cash, in case you lose your job, can’t work for whatever reason or something else comes up that requires a good amount of money.

Check out our Emergency Savings Guide on how to start building these funds.

Paying off high-interest debt, like credit card debt: When you’re trying to save for both short- and long-term goals, paying off debt should be an immediate priority — because the longer you owe money, the longer it’ll take you to save up enough for each of your goals.

And we’re primarily talking about consumer debt, like credit cards. This doesn’t mean other debts like student loans aren’t important, but credit cards typically carry very high interest rates, so carrying that debt around will cost you a whole lot more money over time.

The way you handle credit card debt also has an impact on your credit score than some other types of debts – so the longer you carry credit card debt, the harder it will be for you to get bigger loans down the road (like a car loan or mortgage).

Buying a car, buying a house & other short-term goals: If these are things you want to do in the next five years or so, it’s important to start saving for them now — and to put the money in a safe place where it’s not at risk.

So for these short-term goals (around five years or less), your best bet is to keep the money in the bank. With a savings account, you don’t risk losing any of it (like you would if you were to invest the money), and you also don’t face any penalties or fees when it comes time to withdraw the money.

You can set up a separate savings account for each goal if you think you may be tempted to dip into the money if it’s all together.

If you have an idea of how much car or house you want to be able to afford when the time comes, figure out how much you should be setting aside for each of those goals every month. And if you can’t afford to save as much as you’d like to at first, start small and revisit each goal every couple of months.

Once you pay off debt, you will free up extra money that can go toward these other savings goals. Also, reducing your expenses can do the same (we’ll get more into that below).

Retirement savings: It’s so easy to put off saving for retirement — especially when you’re young and retirement seems like a lifetime away, or when you’re barely able to save enough for everything else in your life.

But here’s why it’s so important to start now: the earlier you start saving, the more time your money has to grow and the wealthier you’ll be in retirement.

Clark often talks about a chart that shows how a 15-year-old could save just $2,000 a year for 7 years – and then, never saving another penny again, the money would grow to be $1,000,000 by age 65 – thanks to the magic of compounding.

  • Compound interest is an extremely powerful force that allows you to earn exponentially larger gains on your money over time — so the money you save now is worth a lot more than the money you save later. Here’s a simple example: You invest $1,000 today and earn an annual 5% gain, so $50. That $50 is added to the principal amount of your investment, and then next year, you earn a 5% gain on $1,050, so you earn $102.50. And so on… So, the earlier you start saving, the more your money will grow over time!
  • How to start saving for retirement: If you’re saving nothing right now, it’s OK to start small. Start by saving one penny out of every dollar you make. That’s 1% of your income. Then every six months, step it up by 1%. In 5 years, you’ll be saving 10% for retirement and making a huge impact on your future.

When it comes to saving for retirement, your best bet is to have the money automatically deducted from your paycheck so you never even see it in your account. That way, you won’t miss it.

If you have a 401(k) at work, start saving money through automatic withdrawals each time you get paid. If your employer offers an employer match, that is essentially free money, so try to contribute enough to get that match.

Check out our 401(k) Guide for more on how to get started and how much to save.

3. Continue paying off debt

When you’re facing debt, reducing your expenses should be a motivation to get that debt paid off quicker!

If you have credit card debt, do whatever you can to pay more than just the minimum monthly payments. If you can find the extra money in your budget, pay as much as you possibly can every month toward that debt to get it paid off as quickly as possible.

Here’s how: Make a list of your debts in order of interest rates. Start with the credit card that has the highest interest rate first — and put as much money toward that debt as you can each month, while still paying the minimums on other debts and also setting aside money for your rainy day and emergency funds. Then once that card is paid off, move to the card with the next highest interest rate, and so on.

One way to reduce credit card debt is to transfer the balance to a card with a lower interest rate or to a card that offers a 0 percent interest period. But you should really only do that if you know you can pay off the total balance during that initial 0 percent interest period.

Important note: When you pay off a credit card, do not close the account — that will hurt your credit score. So once the card is paid off, just let it sit at a balance of $0.

4. Reduce expenses and increase your income

Reaching your goals can seem impossible at first, but once you make a few changes, you’ll have a whole new outlook on things.

One of the best ways to start saving more toward each of your goals — and to get your debt paid off quicker — is to reduce your expenses. Eliminating unnecessary and wasteful spending can free up a lot of extra cash.

Go through your statements from last month line by line. List out every single expense, including your fixed costs — like rent/mortgage, insurance bills, debt payments etc. – as well as every other purchase you made – every coffee, movie rental, bar tab, grocery bill etc.
Start with the expenses you can easily reduce. You probably can’t change your rent or mortgage any time soon, so look at the things you can control, like subscriptions, groceries, car insurance, your cell phone bill and more.

Here’s a full guide on how to reduce your monthly expenses.

5. Keep it separate and make it automatic

If you haven’t heard the phrase “pay yourself first,” it will change your life.

If you don’t automate your savings, you’re much more likely to reach the end of the month and realize you’ve spent what you had planned to save.

Once you cut back on your spending and start to have some spare cash, it’s important to keep it in a safe place so you won’t spend it — because no matter how disciplined you are, if it’s there, it’s tempting.

So if you don’t already have a savings account, open one. Having a separate account for each goal can also keep you more disciplined and help you keep tabs on everything.

Then budget out how much extra money you will have each month for each goal and set up an automatic direct deposit from your paycheck. Have each specific amount sent directly to each account — that way the money is put into savings before you have a chance to spend it.

After just a few months, you’ll be able to see your savings really start to grow!

3 more quick tips to save more money

1. When you pay off a debt, keep making the payment — to yourself!

The obligation of paying off a debt each month — like a car loan or credit cards — isn’t very fun. But there’s a way to turn that monthly habit into one that benefits your future.

Getting a debt paid off can free up a lot of extra cash, depending on how much you were paying each month, and that cash can be turned into savings. So once you get a debt paid off, instead of spending the extra money, keep making the monthly payment — but from now on, make it to yourself.

Take the money you were previously putting toward debt and have it automatically taken out of your paycheck and deposited into savings.

2. Tax refunds, bonuses and raises

If the money is in your account, you will probably spend it — or at least some of it. If you really want to save more money, take any extra cash that comes your way — in the form of gifts, bonuses, tax refunds or even extra money from a pay raise at work — and put it directly into savings.

If you get a raise at work, live on the same amount you were already getting by on and put the extra cash away for the future. You’ll be glad you did when it comes time for a big purchase or when you start to see that money really grow in a retirement account.

3. Save spare change

OK, so it may not make you rich, but every little bit counts. Take any spare change you have in your pockets, purse or wallet at the end of each day and put it into a savings jar. And don’t touch it! Then at the end of the month, take the money to the bank and deposit it into savings!

Final thought

Keeping track of your budget and savings goals can be a whole lot easier with a little help! There are tons of great apps and websites out there that will track your spending and savings for free — so you can keep tabs on each area of your budget and where every dollar is actually going.

You can also make it a friendly competition, maybe with your spouse, family member or close friend!

When you’re young, saving may not be super cool, but when you finally recognize the fact that you’re an adult, I promise it will be a lot cooler to have money in the bank than a bunch of Instagram photos of everything you wasted all your money on.


5 fast facts that will help make filling out FAFSA a breeze

Published: Wednesday, December 13, 2017 @ 10:32 AM

The following points are what you need to know, as well as common mistakes to avoid when filling out the FAFSA Fill it out – you have nothing to lose The sooner you submit your FAFSA, the better Gather the information you'll need Watch out for common mistakes like leaving fields blank Keep an eye out for requests for more information

It's that time of year again when parents and college or college-bound students fill out the FAFSA (Free Application for Federal Student Aid).

The idea of wading through a form – especially one that requires financial information – is definitely not an appealing idea, but the FAFSA could be a tremendous help in getting your student money to attend college.

RELATED: 20 financial aid terms every college student and parent should understand

The following points are what you need to know, as well as common mistakes to avoid when filling out the FAFSA.

Fill it out – you have nothing to lose.

You may think that you don't need to fill out the FAFSA, especially if you believe you might not qualify for need-based aid. But there's no income cut-off point with federal student aid, according to the U.S. Department of Education. In addition, the FAFSA can help you qualify for all kinds of grants, loans and scholarships, including those offered by your state, school or private organizations.

By investing a few minutes of time, you could reap thousands of dollars in potential rewards.

Submit it ASAP.

The sooner you submit your FAFSA, the better, according to consumer adviser Clark Howard. Although the federal deadline isn't until June 30, 2018, you should check with the financial aid administrator at colleges you're interested in to make sure their deadlines aren't earlier.

Submitting earlier will help you plan how you'll pay for college. You'll also have a better chance of getting as much aid or scholarship money as possible since some colleges distribute their available money on a first-come, first-serve basis, Howard says.

Gather the information you'll need.

The FAFSA asks questions about the student as well as his or her parents if the student is a dependent.

You'll need the following information on hand as you fill out the FAFSA:

  • The student's Social Security number
  • The parents' Social Security numbers
  • Driver's license number (if you have one)
  • Alien registration number (if you're not a U.S. citizen)
  • Federal tax information for the student (and his or her spouse, if applicable) and the parents. This can often be imported online, so you may not need your records.
  • Information on the student's and parents' assets, such as money held in bank accounts and real estate holdings (not your primary residence)
  • Records of the student's or parents' untaxed income, such as veterans benefits and interest income

Watch out for common mistakes.

The National Association of Student Financial Aid Administrators points out some common mistakes that can delay your form's submission or cause you to not get the aid and scholarships you might qualify for. They include the following:

  • Leaving some fields blank – Instead, put in a "0" or "not applicable."
  • Listing an incorrect Social Security or driver's license number – It pays to recheck these numbers.
  • Failing to use your legal name – Use the name on your Social Security card, not a nickname.
  • Forgetting to list colleges – Even if you're not sure of which college you'll be attending, add any reasonable possibilities to the list of colleges that will receive your information. You're under no obligation to apply to or attend these colleges, and they can't see which other colleges you're interested in.

Keep an eye out for requests for more information.

Your FAFSA may be selected for verification, which means you'll have to provide some additional or supporting information, U.S. News & World Report explains. This process doesn't necessarily mean you've done anything wrong. You may have a discrepancy or mistake on your form, but some FAFSAs are just randomly selected for verification (lucky you!).

These requests will often come to the student's personal email account or university email address, so he or she will have to be diligent about checking it and responding to any requests by the stated deadline.


Is credit monitoring a scam?

Published: Wednesday, November 22, 2017 @ 12:01 PM

Clark Howard explains how to protect yourself.

With the recent massive security breach of Equifax — one of the three credit bureaus with which many may have thought their private information was safer than most — now many people are dealing with more insecurities, wondering where they can entrust their private information, if anywhere.

Here are some options:

Credit freezing

Better and cheaper than credit monitoring, an option for optimal security is freezing your credit through each of the three credit bureaus (Experian, Equifax and TransUnion), according to WSB money expert Clark Howard at

The fee is $3 to $10 per person per bureau, depending on your state, to allow you to seal your credit reports — except now it's free with Equifax from here on out due to the recent data breach.

You will be provided with a personal identification number (PIN) that only you know and can be used to temporarily unfreeze (or "thaw") your credit when legitimate applications for credit and services need to be processed such as when you are buying a car.

This added layer of security means thieves can't establish new credit in your name even if they are able to obtain your personal information.

LifeLock vs.

While LifeLock advertises it can help consumers secure their information to guard against identity theft, LifeLock charges monthly services that start at $10 a month.

This kind of credit monitoring is not the same or as effective as a credit freeze, said Craig Johnson for

Instead, he recommends for free credit monitoring.


If you haven't already frozen your credit, now would be the time since Equifax recently got hacked and the information of possibly 145.5 million people was attained by these hackers.

Information accessed primarily includes names, social security numbers, birth dates, addresses and, in some instances, driver's license numbers.

To try to compensate, Equifax is offering free identity theft protection and credit file monitoring (but only through Jan. 31, 2018) with its TrustedID Premier.


Another point of confusion is the unsolicited free Dark Web Email Scan offered by Experian to your email, leading to a monthly fee for further scanning.

Experian IdentityWorks also offers a free 30-day trial membership for identity theft protection and resolution, involving a monthly automatic deduction of $9.99 for the plus plan or $19.99 for the premium plan.

It's free to cancel within the 30-day trial period, but the consequences are not revealed up front for those who decide to cancel their membership once the monthly fees begin.


The third credit bureau, TransUnion, also offers credit monitoring at $19.95 monthly. However, TransUnion says it offers free identity protection through its TrueIdentity program.

Free helpline

Those with specific questions about the Equifax breach and how it may impact them may contact Howard's Consumer Action Center — a free helpline open 10 a.m. to 7 p.m. EST Monday through Friday with Team Clark volunteers available to answer concerns at 404-892-8227.


4 of the best ways to turn your home into a cash cow

Published: Friday, November 17, 2017 @ 4:17 PM

Sites like Airbnb let you rent out your home to make money.
Sites like Airbnb let you rent out your home to make money.

Your house is a large expense with many associated costs like a mortgage payment, insurance, maintenance and more.

RELATED: How to Cash In on Short-Term Rentals Like Airbnb, VRBO

It provides a roof over your head, of course, but since it usually costs you money each month, why not put it to work for you and earn some cash in the process?

The following are four ways your house can make you money:

You can relax on the lake, in the woods or even in the back of a van when you're looking for a staycation in Gwinnett County.(Airbnb)

List your home with Airbnb or VRBO.

If you're planning to be out of town for a few days or don't mind bunking with a friend, you may be able to make some money by renting out your home through sites like Airbnb and VRBO.

Before jumping in, you'll need to take time to learn about the market, your expenses and any taxes you may need to pay. And before you list your property, you'll need to understand how to make it stand out with a good listing, including compelling photos and competitive pricing. Airbnb has a series of toolkits to help with this.

RELATED: Atlanta has Airbnb's most desired rental property in the world.

Rent it out to the area's growing TV and film industry.

When TV, film and commercial producers want to depict a home on screen, many times they'll rent the real thing, according to Money. It can be inconvenient for owners, however, since their homes may be taken over by a large crew and be completely rearranged.

On the other hand, homeowners often have fun with the experience while making some extra money. And while you're watching TV or a movie, you may be able to spot your home.

Host a foreign exchange student or faculty member.

Temporarily hosting a foreign exchange student or faculty member who's studying or teaching in this country can help you make some extra cash for anywhere from six weeks to six months at a time. You'll also be exposed to a different culture and language, and the experience could help you form a bond that lasts even when your guest returns home.

The Penny Hoarder suggests contacting student housing offices at local community colleges and universities, asking to be placed on their list of host families. After this, you'll have to apply, be interviewed, and allow your home to be toured. You'll also need to pass background and reference checks.

The 4-bedroom house sits on a corner lot with a concrete driveway that leads up to the two 2-car garages both having rear service doors. CONTRIBUTED PHOTOS BY KATHY TYLER

Rent out your driveway or storage space.

If you have extra space in your driveway, you may be able to make some money by letting others park there, according to Men's Health. This is especially true if you live near a commuter rail line or sports stadium, but you'll need to check to make sure you're not violating any local ordinances. Check out websites like JustPark to get started.

The Balance also suggests renting out any extra storage space you may have. From vehicles to personal items, your garage or home could help you make money through a site like StoreAtMyHouse.


5 ways to get the most out of your health insurance plan

Published: Tuesday, November 14, 2017 @ 3:15 PM

Here are five ways to ensure you're getting the most out of your health insurance Choose your plan carefully Take advantage of preventative care benefits Work within your formulary Utilize HSAs and FSAs Watch out for surprise out-of-network charges

Health insurance has a large impact on your finances, so it pays to get the most out of your plan.

Understanding its ins and outs can be confusing, but it's worth your time to check on benefits you could be losing out on or mistakes that could cost you money.

Here are five ways to ensure you're getting the most out of your health insurance:

Choose your plan carefully.

When it's time to renew your health care coverage, consumer adviser Clark Howard recommends not just blindly signing up for your current plan, even if you've been happy with it.

Your plan – as well as other options you may be able to sign up for – may have changed. Take a close look at the co-pays, deductibles, in-network providers and other specifics to make sure you're making the best possible choice.

Take advantage of preventative care benefits.

Almost every plan, according to, offers preventative care benefits that are free. You won't have to pay a co-pay or meet your deductible to get these services at no charge.

Services for adults include age-appropriate vaccinations and colorectal cancer screenings for patients over 50.

RELATED: 8 ways to get the cheapest car insurance possible

Work within your formulary.

Health care plans typically have a formulary, which is a list of medications that they're willing to pay part of or the entire cost of. It may include a list of preferred medications, for which it will pay the highest percentage of the cost.

It pays to be familiar with your formulary before you get an unpleasant surprise at the pharmacy, according to NerdWallet. Print out a copy of the document from your health insurance company's website, or call up an online copy at your doctor's office. Your doctor can work with you to make sure you get an effective medication that you can afford.

Utilize HSAs and FSAs.

If your health insurance plans allow you to put aside tax-free dollars in a Health Savings Account (HSA) or Flexible Spending Account (FSA), you should learn how they can help you. Consumer advisor Clark Howard's website,, has a chart that explains the pros and cons of each.

An HSA is usually associated with high-deductible plans, and like an FSA, it helps you save money to pay for health care expenses. These can include everything from prescription eyeglasses to medication.

Watch out for surprise out-of-network charges.

Your insurance plan has a list of network providers, and when you can, you should stay in-network. That's easy enough if you're visiting a single doctor, but if you need to have surgery, things can get more complicated.

For pre-planned surgery, Consumer Reports recommends talking with your doctor's billing department to get a list of everyone who will provide your care, including radiologists and anesthesiologists. Call your health care company to see if they're in-network, and if not, ask your doctor if in-network providers can be used.