If we took a quick look into your savings account, what would we find? If you are like 20 percent of Americans, the answer is nothing.
Bankrate.com surveyed people about their savings habits, and the survey showed 65 percent save little or nothing. The reason why people can’t save? Expenses. It topped the list at 39 percent.
Experts say you should save at least 15 percent of your income. So if you are not saving yet (or enough), here are some ideas to get going.
The website howmuch.net used Bureau Labor statistics to show what an “average” person (earning about $74,000) spends on many categories. Each of the top three categories has the potential for you to trim expenses and help boost your savings.
1 – Housing
The rule of thumb says you should not spend more than 30 percent of your take-home pay on housing. However, that doesn’t stop US citizens from spending more. Americans spend 32 percent on average, according to the BLS.
If you rent in a popular area, it could be worth significant savings to find a cheaper place to live. You can also split rent with a roommate. Homeowners can sell their current homes and downsize. Other options include adding a renter and reviewing what it costs to maintain your home.
2 – Transportation
Transportation is the second-largest cost for a US citizen (18 percent). However, there are multiple ways to reduce the cost.
If you own a car, it costs you about $8,500 per year to maintain the vehicle, according to AAA. It might be cheaper to use public transportation or ride services like Uber and Lyft.
If you are a commuter, it costs you roughly $2,600 per year in commuting costs. You can significantly reduce those costs if you use commuter benefits.
Commuter benefits allow commuters to get up to a 40 percent savings in commuting expenses. The benefits include public transportation commuters, like bus or subway riders, and parking. If your business does not offer commuter benefits, it’s worth it to inquire on whether you can get them. A company can save up to 7.65 percent in payroll taxes, so it is a win-win for everyone.
3 – Food
We all love our takeout and a great meal at a nice restaurant. However, it costs us. Americans spend about $7,200 on food per year, which is 12.6 percent of income, according to the BLS.
It’s easy to say it, but if you are eating our every week, you probably have room to cut back. You can cook at home and use the extra money to increase your savings.
If you want to increase your savings, the best thing to do is take a hard look at your receipts and bank statements every month. If you don’t know, see where you are spending your money — there might be room to sock some away.
If you want to learn more about commuter benefits to save money, download our 101 Guide now.