Prices for most everyday items have been on the rise over recent years. Because of that, saving money has become extremely difficult for many. In fact, a recent GOBankingRates survey found that half of all Americans have less than $500 put away in savings.
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This means it’s important to find ways, even if it means getting creative, to save a portion of your income each month. This will help you feel more financially secure and be able to afford unexpected expenses without relying on your credit cards.
In a recent YouTube video, money expert Rachel Cruze discusses ways to save $4,000 quickly.
Now, you might be wondering why she recommends $4,000. What’s special about this number? Well, according to the U.S. Bureau of Labor and Statistics, the average annual salary in the U.S. is $65,470. After factoring in taxes, this leaves $4,000 per month in income for the average American worker. By finding ways to save $4,000 fast, it’s like being able to save your income for an entire month.
So let’s look more into what Cruze recommends doing.
Pay Close Attention To Your Budget
The very first thing Cruze says you need to do is “clamp down on your budget.” It’s important to understand how you’re spending every dollar each month. Using a budgeting tool like EveryDollar you can understand where each dollar is going. From there, you can find places where you might be able to cut back.
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Cruze talked a lot about how people can find themselves in a spending rhythm, and until they actually take a step back to understand how they’re spending money, these habits might go unnoticed.
As an example, she mentioned streaming services. Maybe you signed up for one to watch a show, but now it’s over, and you’re still paying. By digging into your spending, you’ll see that you’re paying for something you might not need anymore.
Boost Cash Flow With a Side Hustle
Once you’ve dug into your budget and found some ways to cut back on spending, Cruze recommends looking for ways to increase your income with a side hustle. These can provide you with a little extra money which can go a long way in saving an extra $4,000.
There are many things you could do as a side hustle. Cruze even suggested that you take what you do for your primary job and offer it to clients on the side as well. Or you could look into things like driving for a rideshare company or delivering food for a food delivery company. You could even do house-sitting, dog-sitting, or babysitting. Finding a way to make a little extra cash will go a long way.
Putting It All Together
Once you’ve found the expenses you no longer need and started bringing in a little extra income each month, Cruze recommends following a few of Dave Ramsey’s Baby Steps.
With the money you’re saving, make sure you build an emergency fund of a least $1,000. This is going to help you afford any emergencies that might pop up. Once that’s done, you need to pay off all your debt, other than your mortgage. From there, look at building your emergency fund up further so that it has three to six months’ worth of expenses.
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This article originally appeared on GOBankingRates.com: How To Save $4K Fast, According to Money Expert Rachel Cruze
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