4 Easy Steps to Start Putting Money Into SavingsWritten by Carly Simon-Gersuk
Costs add up fast and it can seem like putting money aside is a far fetch dream. But even the smallest amount can lead to big rewards. Most financial experts recommend having between three to six month’s salary set aside. This could get you through serious emergencies. Once you have that amount of money saved you can also use your savings to start planning for larger purchases, such as a home, retirement, or college fund.
Here are 4 easy steps you can take to start putting money aside into your savings.
Start by just putting one percent of your income into your savings each month. This will get you in the habit of switching your mental mindset into someone who is saving for the long term. It will be easier to ramp up your savings as this habit forms and you can increase what percentage you set aside over time.
A budget can be an essential factor in reaching long-term and short-term financial goals. By determining what you spend monthly on necessities - rent, groceries, utilities, insurance, etc - and luxuries - eating out, entertainment, etc - you can see what things cost. Knowing what you are spending you can allocate your funds. Can you cut anything or reduce any expenses? Those reductions can be set aside for your savings.
With a set budget, you can determine how much you want to save each month and with a consistent income, you can set up automatic transfers to your savings account. By automating what percentage goes to your savings, you can eliminate any temptations to spend that money on unnecessary things. Financial experts recommend that by this stage you save 10% of your income.
Build up your savings with unexpected or additional funds that come from refunds, birthdays, taxes, and so on. This too will eliminate temptations of impulse buying and will boost your savings.
Written by Carly Simon-Gersuk