Sunbit CEO Arad Levertov Featured in Forbes
Nest Egg Depleted? 12 Expert Tips For Rebuilding
The pandemic has brought uncertainty to the national economy and has impacted household budgets. In addition to a volatile market, many have faced reduced work hours and work stoppages—forcing individuals and families to dip into their savings to stay afloat. Households need to rebuild their emergency savings if they’re to be ready for potential future downturns.
Saving when conditions are still uncertain requires careful planning and smart strategies. Below, 13 members of Forbes Finance Council share expert tips for shoring up a depleted nest egg.
1. Designate an amount to save in your monthly budget.
You can start to replenish your savings by creating a monthly budget for yourself or your household and designating a specific amount of money to go directly to your savings. This does not need to be a large amount, but treat the contribution as nonnegotiable, just as you would a monthly bill. Over time, the practice of budgeting for your savings will help get your finances back on track. – David Haass, Elite Insurance Partners, LLC
2. Spread spending over time.
Americans should look for ways to spread spending over time so they’re conserving cash where possible while also being careful not to acquire long-term debt. For many critical goods and services, short-term payment plans with a clear repayment schedule and specific end dates can be useful tools. They can help consumers conserve needed cash while they look for ways to cut costs or increase income. – Arad Levertov, Sunbit, Inc.
3. Start small, but start now.
Don’t wait to replenish your savings—start now. It doesn’t have to be big changes. Round up to the dollar on your expenses, and put the change in a savings account. Ask yourself what expenses you could live without (that daily latte?), and instead take the money you would have spent on them and save it. Refinance your home, and put the difference between your old and new payments away for retirement. – Sheryl J. Moore, Wink, Inc.
4. Pay yourself first.
Consistently setting aside a small percentage from each paycheck can help recoup savings accounts. In this day and age, there are dozens of financial apps that can help individuals and households set aside money for saving or invest with as little as $1 per month. – Matthew Meehan, Shield Advisory Group
5. Reduce your burn rate.
The economic havoc being caused by the global pandemic continues to compound. A comfortable retirement may now be impossible for many Americans—even those who planned carefully. Tough decisions have to be made. Be rabidly focused on reducing your monthly operating costs, and question every aspect of your lifestyle. Right now, for many Americans, the only option may be reducing burn rate. – James Hewitt, CEO, Advisor, Angel Investor
6. Flip the script on automation.
Eliminate subscriptions or other recurring expenses—they’re costing you money you may never think about. Conversely, automate saving in any way and in any amount that’s comfortable for you. The method can be manual, such as saving all pocket change, or it can be more literally automated, such as sweeping funds (of any amount!) into a holding place before you can spend them. Get started now! – Wm. Scott Page, LifeGuide Partners
7. Get a virtual gig.
There are incredible freelance platforms, such as Upwork and Fiverr, where you can get paid to do pretty much anything online. As a client, I have spent and continue to spend thousands of dollars hiring editors, translators, writers, designers, etc. I can only imagine what it is like to be on the other side, with endless daily opportunities as businesses are constantly looking and hiring! – Gabriela Berrospi, Latino Wall Street
8. Create ‘buckets’ for your money.
I advise my clients to create “buckets” for their money. When you earn income, bucket No. 1 is for taxes, bucket No. 2 is for operating expenses, bucket No. 3 is for special projects, and bucket No. 4 is for savings. If you are following this process, when you tap out your savings you can replenish by saving in bucket No. 2 and stopping bucket No. 3, reallocating those funds to bucket No. 4 until you are caught up again. – Evan Jehle, FFO LLC
9. Reduce your tax burden.
Getting a big tax bill when your savings are depleted could be catastrophic. So consider reducing your tax burden through tax-loss harvesting. Many people had a great 2019, but 2020 will likely be a different story. Saving money on taxes could be like getting a big raise at work. Cutting your tax bill might just fill up your piggy bank again. – Brian Henderson, Whitnell
10. Track your actual spending.
Most families have a budget, but very few seem to reconcile their budget with actual expenditures. If you planned to spend $10,000 in a given month but actually spent $12,000, what did you spend it on? Finding and eliminating unplanned expenses can help you live within your means and save for the future. – Mia Erickson, Whitnell
11. Use tools to help you save and reduce expenses.
Be intentional about rebuilding your savings. Even during uncertain times, take advantage of tools and resources that can help prioritize savings and streamline expenses. Look for banks and mobile applications with useful features, including automated savings based on spending or a set amount. Some also have unique dashboards that can help monitor spending habits and identify new areas where you can save. – Sal Rehmetullah, Fattmerchant
12. Don’t look at your money on an everyday basis.
If you know that you are spending responsibly and saving where you can, your savings will rebuild. You can make yourself crazy and make uninformed decisions by constantly monitoring your bank account balance and trying to figure out how to get your money back. Take a breath and take each day at a time, knowing that your savings will bounce back in time. – Jonathan Moisan, Advertise Purple
View the original article on Forbes at this link.