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With a completed spending quiz and cash-flow analysis, you've determined where you're spending your money. Now it's time to think about how you can make small changes to save more. Does your income completely cover your costs? Are you spending too much on unnecessary things?
Reduce expenses
If your income doesn't cover your costs, then check your spending for luxuries. Could you modify your spending on any of these luxuries to save extra money?
A savings example
Sue brings her breakfast and lunch to work every day. Her weekly cost of preparing and bringing in her food (breakfast and lunch) totals approximately $15–20 a week. Fred prefers to buy his food every day, which costs him about $10.50 each day, or $52 a week. The difference in spending is more than $130 a month and $1,650 a year.
Save money without sacrificing spending
Does it seem impossible to cut back on your current spending habits?
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Use your pay raises to increase contributions to your investments.
If you can live on your current salary using the positive money-spending habits you have learned, start using your raises to increase your investment contributions. When you receive your raise, increase your contribution at the same time.
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Save your bonuses.
If you lack the discipline to save out of your paycheck, automatically saving your bonuses could be the extra money you need for your short-term goals.
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Continue a loan or credit card.
After a loan or credit card is paid off, continue the same amount you were paying each month, but instead apply the amount as a contribution to your investments.
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This information is intended to provide general investment education and is not intended to provide investment advice. For more specific information on how to allocate your investment savings plan, please contact your financial advisor or Delaware Investments.
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