The ABC's of Saving Your Money

Having a rainy day fund is critical to getting ahead financially. A healthy savings - generally 3 to 6 months of take-home pay - can help prevent going into debt. Want to start saving money but not sure where to start? Read on for five easy tips to get you started.

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·      Start small. If you’re living paycheck to paycheck, you can aim to save $10 a month to start. Once you've maintained that goal for 3 months, you can set a goal of saving $100. To reach it, you can increase the amount you save from each paycheck, or plan to keep up your current savings plan for 7 more months. Also, make a budget of everything you spend each month - from car loan payments to your Spotify subscription - so you know where your dollars are going, and where you can cut out non-necessities to make room for saving.

·      Automate your savings. Have your paycheck direct deposited into a checking account, then set up an automatic transfer from your checking account to a savings account for the amount you'd like to save before you have the chance to spend it. Some employers even let you split your direct deposit between a savings and checking account.

·      Enroll in a "roundup" program. Many banks and credit unions offer a service where you can have debit card transactions rounded up to the nearest dollar. The amount the transaction is rounded up by gets deposited into a savings account. For example, if you buy a drink for $1.50, your debit card would be charged $2.00 and $.50 would be deposited into your savings account.

·      Keep your savings out of reach. Keeping your savings in an account that's not as easily accessible as your spending money can reduce the temptation to spend it. For example, if you do most of your banking at the bank next to your office, you could put your savings at a bank across town or an online bank. Just make sure you are still able to access the funds in an emergency.

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·      Reward yourself. This one can be a little tricky because you don't want to undo all of your hard work! However, you can still incentivize yourself; once you reach your savings goals, allow yourself to buy the fancy cheese at the grocery store, or a latte.

If you haven't already, the best time to start saving is now. Start with a few of these tips and stay tuned to the Youthentity newsletter for more money tips!

meghan grabowComment