When purchasing a home, you’re ability to get a loan at a low rate rests on your capacity to be a responsible spender and saver. Good financial habits will not only help you score that lower mortgage rate, but it will also help you boost financial security. The problem is that many Americans aren’t saving. A report from interest.com conducted a survey and found that the the median household savings nationwide is $0, even though the average American has $668 left over after paying their bills. In 2012, only 22.6% of San Diego residents reported adding money to their 401(k) or IRA account. With so many missed opportunities to save, Greater Home Loans made a list of tips and tricks to help your savings account grow.

Track your spending

Take 14 – 30 days and make a record of everything that you purchase. Technology has once again made our lives easier and there are now many apps that you can use to track your spending. Many of the apps provide visual aids, such as charts and graphs, to help you get a better picture of your spending. Once you have added in all of your expenses, you’ll want to use this tool to figure out where your spending habits have gone awry.

Create a budget and stick to it:

Once you have determined what you are spending money on, you’ll want to create a budget. Make a list of things that you have to pay for each month; rent, transportation costs, student loan bill, gas bill, etc. Now you’ll need to use the money you have left over and prioritize your expenditures. Follow these tips to help you stay on budget:

  • The Envelope Method: Using a credit card, as opposed to cash, completely changes the mindset of the shopper; rather than focusing on price they are concerned with product features and are even willing to spend twice as much for an item. Because of these trends, you might want to start out getting no track with cash. One way to stick to your budget is by adopting the envelope method. With this method you will want to set aside the money you need for different expenditures into different envelopes and label them for their purpose. For example, you might want to set aside $70 for gas or $200 for groceries. This will help you stay on track because you only have that cash for the month.
  • Tips for making your budget realistic:
    • First, cut out what you can see yourself living without. For example you might not need your magazine subscriptions or cable. You don’t want to start too strict, too fast or there is no way that you’ll be able to maintain the budget.
    • Swap where you can: See you where you can make some swaps for the cheaper alternative. For example, go for the generic item or opt to get your coffee at 7-11 (or better yet at home) rather than getting it at Starbucks.
      Set Goals: It helps to know that you are saving for something. Perhaps you’re saving to get a mortgage for your dream home, a backpacking trip, or to go back to school.
  • Consider setting an automatic payment that goes to savings. This trick will help you get used to living on a smaller amount. It will also make it easier for you to save rather than just automatically pulling from your cash, only to find out that you don’t have any money to send to savings at the end of the month.

Add more money to the pot…

Get a side job:

If you ever find that you have some extra time on the weekends or during the week you might consider getting a side job. Use your skills to make some extra cash that you can put towards your savings. If you find that you are good with kids, then you could work as a tutor or babysitter. Depending on your living situation you might consider opening your home up to Airbnb guests or getting a roommate. You can also use your spare time to work as a Lyft or an Uber driver and meet some new people from your city!

Tax write-offs:

Keeping track of your expenses also makes your life easier when tax season comes along. You can also use your tracking to your advantage through tax deductions. These will help lower your taxes and help you keep more money in the bank. Some frequently overlooked tax deductions for college tuition and fees, the cost of a job search, charitable contributions. Talk with your CPA about tax deductions you might be missing out on.