Saving money is the hardest easy thing I have ever done. I much admit I was one of those people who always had an excuse why I can’t save. My check was short; I have too many bills, I have more month than money. And my favorite excuse; something came up. It was so hard at first for me to start saving; I finally had to make a decision that saving was an important part of my life. Once I made the decision to save, I still had to start saving. Honestly, deciding was step one. Only after I made saving a priority did the excuses end and the saving begin. Here are a few tips that help me to save.
Starting small was a critical part for me. Although most financial professionals suggest you save 10% of your total income, I had to get that 10% thought out of my head because it just didn’t fit into my budget. Many financial institutions require that you start with a $2,500 investment. I did some research, and I found an investment company that would take my $50 a month towards retirement savings. Once I saved up $250, they then took the money and purchased what is known as a mutual fund.
A mutual fund is a group of single stocks which allows you to own a small portion of business. Stocks are certificates that represent a portion of business. I know saying the words mutual fund may make some readers a little nervous. A lot of people get uncomfortable because they don’t understand how investments work.
Make It Automatic:
The reason the IRS can take 13+ percent of your paychecks is that they get theirs before you get yours. Therefore, you don’t miss it. Making it automatic is the same thing. If it is automatic, it makes the transaction easier. Having one bank withdraw money from another bank electrically every month is easier than me getting in my car and doing the transaction me. Set it up and simply forget about it. If you must check it, only do so quarterly, bi-yearly, or yearly. Don’t keep looking or you will be tempted to spend it!
Plan Your Saving:
After I had started saving, I realized that not all the money I was saving was for the same thing. I need some money for retirement, my boy’s college, emergencies, Christmas and new stuff I wanted to buy a car. I had to figure out how much I needed or wanted in each area. Then I created a plan. I read a little about emergency funds and found that $1000 was a good starter amount, so I did that first.
Then I spoke with my broker about the retirement and college funds. We worked out that $50 I told you about earlier. And every year I increased that amount to something a little higher. I opened a Christmas account at my local bank and them auto-deposit it into that account monthly. I also have a separate account for things I may want to buy. I also use it for if I want to travel. I save money in that account for planned but non-priority ideas. This account usually has a small balance unless I’m saving for something extra.
Don’t Make It So Easy:
Don’t make it so easy to get to the money. You don’t need a debit or ATM card to your savings account. You don’t need checks to a checking account you are using for saving either. The only way you should be able to get the money is by going to the bank and making a withdrawal or calling your investment broker. Technology has made banking too easy and accessible. You can transfer funds almost anywhere. You want to safeguard yourself from this by either using different banks or separating your accounts at the same bank. If you decide to separate your accounts, your local bank can help you with that as well.
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