You want to save money, but how do you get started? There are always bills to cover, debt to pay, and time is tight. Though these are all real obstacles, they are ones that can and should be overcome. The current personal savings rate in America is in the four percent range – far short of the ten percent most money management professionals recommend to achieve financial security.
Saving money doesn’t happen without taking action. To get you into the swing of things, first recognize the importance of setting aside some cash each month or paycheck. After all, how many times have you wished there was some forgotten account you could tap into to pay for a new set of tires or to do something fun? Without savings, you have to do without – or worse, put it on the credit card. Thankfully, there are many painless and surefire ways to begin a cash-stashing routine.
- Develop a detailed budget to determine how much you are capable of saving each month. Begin with whatever you can afford, even if it’s only a few dollars.
- Set up an automatic transfer from your checking to your savings accounts, or use payroll deductions right from your paycheck. What you don’t see you don’t miss.
- Save all or a portion of each raise you receive.
- Deposit bonuses, income tax refunds, and monetary gifts from birthdays, holidays, or other special occasions into savings.
- Put yourself on a short-term austerity program. Commit to buying only what you absolutely need and put the difference into savings.
- Save all of your loose change. A quarter here and a dime there add up fast.
- Once you’ve paid off your car or other installment obligation, put the same amount in savings.
- Save even if you have debt. You’ll have funds available for emergencies, kick the habit of borrowing, and establish a positive routine.
Once you have a savings plan in place, monitor it regularly. Watching your nest egg grow is thrilling. Take pride in what you have achieved. And don’t panic or give up if you experience a setback – read just your budget and try to make it up next month or in future installments.