stockvault-piggy-bank117574Money is tight for a lot of people right now – there’s no denying that. And, one of the big problems that occurs in times like these is that  it becomes VERY hard to think about putting money into savings when you’re barely able to make ends meet. However, it is critical that everyone find a way to save – here’s some tips to get you started.

Start small. The point here is to simply get started. Aim for placing 10% of your take-home from each paycheck into an interest-bearing account. At the end of a year, you’ll have a little more than one month’s salary as your emergency fund, and it’s likely that you’ll never miss the money from your paycheck. But, if 10% is too much at this point in time, don’t give up – start smaller and keep going because it does add up.

Have the designated amount automatically deposited into your savings account. The thought behind this is that you can’t spend what you don’t have, so if you remove temptation by deducting the money before you receive it, then it won’t feel quite so much like you’ve having to give something up.

Shop around for the best rate. If your local financial institutions aren’t offering good interest rates on savings accounts, try searching online. There’s lots of sites that will provide you with rate comparisons and minimum deposits for online banks – some of which offer higher rates. Keep in mind that you’ll want your emergency fund money in an FDIC insured liquid account, though, so avoid making any long-term commitment such as a Certificate of Deposit – you will be penalized for early withdrawal if you need the money immediately for an emergency.

Commit to leaving the money in the savings account. Many people regularly deposit money into savings only to pull it right back out again. So, sit down and make a plan. Define what constitutes an emergency (in advance), and then don’t touch the money unless it meets those guidelines. Also, don’t keep your money in a checking account, as that makes it too easy to access.

Set a goal. Since you’re just getting started, make your initial goal very attainable. The simple act of setting a goal gives you something to shoot for and, once you reach that amount, see if you can dig a little deeper and keep going.

Examine all spending categories. If you could carve $10 out of 15 different spending categories, you’d have $150 each month to go into your savings account. That means that in 12 months you’d have built up a cushion of $1,800, which should hopefully see you through most short-term emergencies.

Include all family members. It’s no surprise that a joint effort will yield a greater result. You can make a game out of saving and have a prize for the person who saves the most each week. Or, set a family goal and reward everyone with a pizza party or special movie night (or another event) that will serve as motivation to keep everyone going.

Save for specific needs. Once you have your emergency fund in place, you may want to begin saving for upcoming needs such as a car, house, holiday purchases, or debt reduction. Some people even have different accounts for each purpose so they can see how close they’re getting to obtaining the item.

Pretend it never happened. When you get a raise or a monetary gift, put it straight into savings. After all, you were living just fine before you had that money, which means that you’ll do just fine without it. And, if you happen to get an income tax refund, think about considering this lump sum as the seed money to begin your three to six month’s income savings account.

It may not seem easy at first but, once you get into the swing of savings, you’ll be so happy you did!

 

souce: nfcc.org

Chad Sabatka

Chad Sabatka is the Internet Sales & Marketing Director for Anderson Auto Group which is a Ford, Lincoln, Mazda, Kia, and Mitsubishi dealer located in Lincoln & Grand Island, NE and St. Joseph, MO. You can follow Chad on .

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