Saving money is a difficult task to master. It always seems
that when things come up, there go your savings. Many people I know never
have any savings to start with.
Saving money is the cornerstone of a successful money
management plan. Without emergency savings when getting laid off, people
could end up a creek. Even with the emergency savings, things would be very
tight and individuals might need to call the bank for assistance.
Now we face the task that many people face. Starting over
with savings.
It seems simple to say. You just put your extra money into
savings. Wrong.
There really isn't such a thing as extra money. You may have
found that out by now. If you are spending, you have no extra money. If you
have debt, you have no extra money.
Where you find saving money is through having a simple
budget. Your budget will identify money for savings. It is hard to start
saving. But once you start, you form a habit that lasts.
Start with identifying why you want to save money. Set
short-term and long-term financial goals. In the short-term, you may want to
buy a new couch. In the long-term, you might want to retire early. These are
the goals that make saving worth a little sacrifice.
Give your goals dollar amounts and time frames. When you
know that you only need to put back $100 a month, it is much easier than
focusing on the $3,000 you need to save. Write down your goals and refer to
them at least once a week. Track your progress and keep it as your number one
priority.
You will eventually find that when you go to buy things, you
are thinking that if you don't spend as much, you will be closer to your goal.
What a nice thought that is. You will find that not spending feels better than
being guilty after spending.
Make sure you have a separate savings account. We like to
tell ourselves that we can leave a cushion amount in our checking. We can't. If
it is there, we spend it. If you put your savings in your checking, you will
dip into it. Have your savings in a separate account that you can watch grow.
If you don't already have a budget, you need to make one.
You will be able to identify areas where you can cut back your spending.
A lot of people have trouble identifying how much they
should put into savings each month. This simply depends on your goals and
finances. If you have a lot of debt that you need to pay down, you may be
saving less. If you have your debt paid off, you may be saving more. Look to
how much your budget says you can save.
The best way to set up your savings habit is to not have to
even think about it. Have the saving amount automatically debited from your
checking and deposited directly into your savings account. You don't ever see
the money, which makes the temptation disappear.
There are no real secrets to saving. You simply have to find
a method that works for you. It is hard to live with no savings. Especially the
emergency savings that protect you from broken down vehicles, financial
mistakes and job losses. Frantically trying to build savings back up, because knowing
how important they really are is a good skill to have
Comments