A lot of people spend a lot of money on their homes, cars, and even vacations, but when it comes to saving money, the best bet is probably not to invest all of it.
“There’s a lot going on that you can’t really measure,” says Michael Smith, an accountant who manages a savings account in his home state of New Hampshire.
“The things that are important are things like gas, electricity, food, and gas prices, so if you’re doing that, you’re really not saving money.”
That means, Smith says, if you’ve saved up for 20 years, it will only take you a few minutes to hit your limit.
That’s because most of the expenses you can actually save with a savings plan are things that would cost a lot more than you could pay for with your current income.
First, you need to figure out what you actually need.
Smith says most of his clients save a lot in the form of cash, and he likes to use that money to buy things like clothes and furniture.
If you’re not able to do that, the easiest way to save is to use some of that money for groceries, or to invest it in stocks or real estate.
“If you can find a better savings strategy for your expenses, you can save a ton,” he says.
“But if you can only do that with cash, that’s not going to be as effective.”
A lot of these expenses are easy to predict.
If your household has a monthly bill, you know you’ll be paying a lot.
If it’s a one-time payment like a rent check, it’s easy to see how much money you’ll need.
“It’s not like, ‘Oh, I need to make this money every month,’ ” says Smith.
“That’s kind of the thing that makes it hard to do this. It’s kind