Saving Money During Coronavirus: Some Not-So-Obvious Tips
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Here's your money briefing for Wednesday, May 27th. I'm J.R. Whalen for The Wall Street Journal.
How has the coronavirus exposed Americans' savings shortfalls?
The coronavirus pandemic has exposed a long-term personal finance problem for many Americans. They don't save enough. A Federal Reserve study last year showed that about 4 in 10 wouldn't be able to come up with $400 in a financial emergency. And while Americans want to sock away some money, many don't know where to start.
It's not something like you don't have to basically go and change the entire way of how you spend your money or save your money. It's still little hacks. It's things you may already be doing. You just don't realize that you're doing them. Or it's maybe tweaking a little thing that you do or maybe doing something twice as opposed to once a month. So it's little things.
More than 30 financial experts have offered some simple and not so obvious tips to help you build up savings. In just a moment, The Wall Street Journal's Christina LaRosa will be here to discuss some of their ideas.
The pandemic has put Americans with little savings in a tight financial spot. The Wall Street Journal's Christina La Rosa is with us to discuss some key savings tips from financial experts. So, Christina, many people are probably realizing they had a lot of excess in their lives before the coronavirus.
They had a lot of excess in their lives. And I think more to the point, they may not have had enough money to tap in an emergency. Or maybe they had the money and they had to tap it because of the pandemic.
The idea of saving is pretty intimidating for a lot of people, especially if they don't have much left after paying their bills.
So the idea is that you can do small things. It's not something like you don't have to basically go and change the entire way of how you spend your money or save your money. It's still little hacks. It's things you may already be doing. You just don't realize that you're doing them. Or it's maybe tweaking a little thing that you do or maybe doing something twice as opposed to once a month. So it's little things.
What small mindset shifts make saving less intimidating?
They're not surprising things. Some of the things are obvious, but taken together, they can really make a difference in how much money you save.
And planning out your expenses can make a difference, like finding one thing to cut from your spending.
Everyone says don't eat out for lunch, take your lunch. It's a lot easier said than done. But maybe it's as simple as don't buy lunch once a month. And then when you take your lunch, you take the amount of money that maybe you would have spent on lunch, whether it's $10, $20, and put that into a fund. So it's not just the idea of, oh, I won't buy lunch that day. It's I'm going to take the money that I would have bought for lunch, and I'm going to purposely put that aside.
Financial experts also recommend ranking your expenses.
One of a great idea that we received from one of the people we tapped is take about two or three months worth of debit card or credit card transactions, print them out, look at them, actually make two copies, give one to yourself and one to a spouse partner. friend, trusted family member, and then you rank them and then have that person separately rank them. The idea is that if you and I both rank something as unnecessary, then that's an easy thing to cut. If there's something that I rank as necessary, but you rank as unnecessary, then maybe I think about cutting that one or not cutting that one, or maybe I just cut it partially. So it's kind of an idea of seeing, wow, if both people really think that this is unnecessary, then it really is unnecessary.
Now, for many people, there's an extra payday that occurs in two months out of the year.
So most of us get paid twice a month. You know, that third paycheck, at least part of that third paycheck can actually be a little bit of found money. Even if it's $20, $30, $100, you just automatically take a part of that third paycheck a month. And I believe it happens maybe four times a year, I believe. And it's like found money. And I think if you actually automate it where you know on what week you're going to get that third paycheck, if you set an automatic transfer of however much into your savings, then it's something you don't even have to think about.
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