“Forgetting” a $20 bill in your winter coat pocket is not an effective way to save money! A wiser approach is to proactively fund your goals. And the same is true for your self-funded healthcare plans. Hoping money simply appears doesn’t cut it! To find ways to expand benefits to your employees, you must prioritize funding and identify savings. What if we told you that you could be getting a head start on savings while enjoying your vacation? Sound too good to be true? Read on!
5 Ways to Save Money for Vacation – or Other Life Events
Planning ahead is the number one way to save money – whether in your personal life or in business. You may want to save for a vacation or a family milestone, or you may recognize that you need to save for unexpected expenses, like medical bills. Here are five tips to help you save for your rainy-day fund. These same tips will also help you protect your company’s bottom line. (Be sure to read the last one!)
1. Record your expenses. The first step to saving money is figuring out how much you spend. This includes the big payouts, as well as the everyday items that add up.
Personal: Use an app like Mint to track your cash and credit card expenses. You can then sort by categories to see where your money is going each month.
Business: The same principle applies, but the input is typically manual into a program like QuickBooks or your company’s accounting system. The key is to make sure that all expenditures are logged correctly.
2. Include saving in your budget. Once you have an idea of how much it costs to run your household or your business, it’s important to set aside savings in your budget.
Personal: A popular budgeting approach is the envelope or bucket method. With this strategy, you place a designated amount of income into specific buckets. Savings should be a proactive bucket, not filled with leftover dollars.
Business: Some companies call this investment capital, others refer to it as a reserve fund. Either way, it’s important to ensure that a set amount of money is set aside for future needs. This needs to be a line item in the budget to avoid “funding bleed.”
3. Find ways to cut spending. This one seems obvious, but we rarely spend money on things we don’t think are important. Instead of eliminating a line item, look for ways to reduce the expenditure.
Personal: Eat out one to two times less each week or prepare your daily coffee at home. Looking for something bigger? Check to see if refinancing your mortgage would save money.
Business: Are there fees you are paying on bank accounts that could be waived? What about credit card processing fees? It’s important to review these charges that can quickly add up month over month. Always be on the lookout for those areas of overspending.
4. Make saving automatic.
Personal: With direct deposit, this is easier than ever! Send a percentage of your paycheck to different accounts. If a portion goes directly to savings, you won’t count on it to pay expenses. Plus, the compounding interest will help the nest egg grow!
Business: While there are more hoops to jump through, you can earmark certain funds to reserve.
5. Pick the right tools. This one is our favorite! And it’s probably the most important!
Personal: There are hundreds of online options to help you track and manage your expenses. You can receive alerts if you are nearing the budget cap you set for a certain category. Or you can install an app that will scan your bills for recurring payments, allowing you to unsubscribe for services you no longer need. The possibilities are almost endless – and fun!
Business: Mistakes happen – and in business those mistakes can be big and very costly. The most expensive area is your self-funded healthcare plan. Reviewing this plan annually is critical. If mistakes are made on your medical claims, your company could be losing thousands of dollars. A comprehensive audit will uncover these mistakes and work to recover YOUR money. Those recovered dollars could help fund the priorities you identified earlier.
We can help make sure overpaid claims errors aren’t eating into your budget. While you’re enjoying your much-deserved vacation, let us audit your plan. While the recovered dollars we find can’t fund your personal vacation, the money will benefit everyone in your company!