This article is reprinted by permission from NerdWallet. With the holiday shopping season just starting and prices of many consumer goods continuing to rise, saving money can seem impossible. But those financial pressures also make doing so even more important.
“Saving is your margin,” says Eric Maldonado, a certified financial planner and owner of Aquila Wealth Advisors. “When things happen — your car breaks down or there’s a layoff, or smaller stuff like gifts for the holidays — you have something to fall back on.” Maldonado notes that saving can also allow you to have money for fun things. The personal savings rate for Americans has been dropping in the last few months, and as of July was 3.5%, according to the U.S. Bureau of Economic Analysis. Maldonado recommends aiming for a savings rate closer to 20% of your take-home income. “You can live off of 80% and put 20% toward deferred gratification,” he suggests. That guidance matches the popular 50/30/20 budget, which suggests putting 50% of your take-home income toward needs, 30% toward wants, and 20% toward savings and any debt payments. “If you’re just starting out, then it can be too daunting, but you can work toward it,” Maldonado adds. Plus: Moonlighting as a car valet, tending bar and moving back home: Borrowers get ready for the return of student-loan payments If you’re looking for ways to power up your savings, consider these strategies:Pause before buying “One of the biggest mistakes people make is buying things you don’t need,” says Vivian Tu, author of the forthcoming book “Rich AF: The Winning Money Mindset That Will Change Your Life” and a TikTok influencer who posts as @YourRichBFF. To counter that tendency, she recommends “taking a beat” before making any purchase. “Really ask yourself, ‘Why do I want that thing? What makes it special?’” she suggests. Tu says asking herself that question helped her scale back on material purchases so she had mor …
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