If you are like me, you are early in your career wondering how you can be more financially independent or just finding more ways to manage your money better. It almost seems impossible with the pressure to save for retirement, a new home, and new financial obligations such as student debt. Here are a few ways that I have found to be most effective.
1. Keep Track of How Much You Are Spending (& Making)
This may seem simple, but I have found that most of my peers lack this skill. Gone are the days where you have to manually keep track of your spending. Download an app that focuses on managing debt and budgeting like Mint.com or Personal Capital. They have an easy to use platform that syncs your bank accounts, credit cards, loans, and investments all in one place. The best part? It is completely free to use.
2. Use Discounted Gift Cards
This is the easiest way to save with little to no effort. We all have necessities or special occasions where we need to buy gifts for family members and friends. Raise.com makes it easy to save money with their selection of e-giftcards, vouchers, and in-store physical giftcards for up to 54% off. They include well known brands such as Target, Gap, Macy’s, and much more. I have personally saved almost $100.
Use my code to receive $5 off your first purchase:
3. Always Look for Promo Codes
One of my other favorite websites is retailmenot.com. They maintain a collection of promotional codes and in-store and printable coupons. How does it work? Type the website into their search bar, and you can find extra discounts, free online shipping, and much more. Stack these with discounted giftcards from raise.com and save even more!
4. Get An Automated Savings App
Saving can go really far even if you do a little at a time. The best part about automated savings apps like Qapital and Digit is that I don’t really notice money being taken out from my checking. Both apps combined helped me save over $1000 in less than a year. Digit links to you checking account, analyzes how you are spending and sets money aside for you each week (usually $5-$50). You can access your savings anytime, and transfer it back to your checking the next day.
Worried about over-drafting? Digit never transfers more than you can afford and they have a no-overdraft guarantee. Qapital is a little different in that you are saving for a certain goal like a trip to Europe or new car. All you have to do is download Qapital, create a profile and link your checking account, and create a goal. You can select anything from rounding up spare change, setting aside a certain amount every week, and other customizable rules that turns any activity into a savings trigger. Both apps are free.
5. Calculate How Much You Owe or Will Owe in Interest
I had many peers who took out student loans, myself included, that did not really understand how interest was accruing. In order to really manage what you owe, you must understand how much debt you will have over time. This is determined by a simple daily interest calculation. To make things easier, I provided an example below.
Step 1: Look at your current principal balance and annual percentage rate
Current Principal Balance: $5000
Interest APR: 4.040%
Step 2: Convert your annual percentage rate (APR) to a decimal
—4.040% = .04040
Step 3: Divide by 365.25 (number of days in a year) to get your interest rate factor
Step 4: Multiply your interest rate factor by the number of days since your last payment
—Most likely 30 days if you pay monthly
Step 5: Multiply by your current principal balance
—.00331828x principal balance
What does this mean? With a current principal balance of $5000.00, an interest rate of 4.040%, and 30 days since my last payment, I will owe $16.59 in interest.