Savings

To err is human, To save is divine…

Saving money for a rainy day or even retirement always seems tough to do. And we always think that if we made more money it would be a lot easier. But there are ways to do it even with the money you already make.

For example, if you pay in cash, save the change. There are banks like Bank of America with their “Save the Change” program that will do that for you if you pay for your purchases with their debit card.

Do a budget. Once everything is written down you will be able to see some of the leaks in your money bowl. Anything from auto-pays for services you don’t use anymore (like gym memberships) to cable bills for those 5 channels that you actually watch that you can get for free or a lot cheaper on a streaming service.

Check your insurance policies, getting a new quote at least once a year could save a good amount. And bundling could help too. While you’re at it make sure you have adequate coverages, saving money here and skimping on coverage will cost you money if you should ever need it. I will go into more detail on insurance in another session.

Put your next raise straight into savings, if you don’t your spending will increase to equal your new income level.

Best and easiest is to automate and “Pay Yourself First”. I’ve seen people take anywhere from 10-20% of their paycheck straight to savings. Even a set amount is a great start. If it is automated you don’t see it and you really won’t miss $20-$30 a week.

When you get the extra cash just put it in a plain old savings account and name it an Emergency or Peace of Mind account. Get it up to $1000 to start with and as you free up more cash increase the amount equal to 6 months of your expenses. Then just leave it alone until you have a true emergency. Maybe put it in another bank that is not easily accessible so it’s not tempting to use.

Once you have the first thousand in you can go back to the insurance policies and raise the deductibles to be covered by the E account. Saving more money on the premiums.

I also see some people take 3% or so and put that into a “Spending Without Guilt” account. That way you don’t have to eat rice and beans everyday.

So… with bad debt payed off and a Rainy Day fund filled then it’s time to start investing for financial freedom and/or retirement.

Let me know in the comments if you use other unique ways to find and save extra money.

Until next time, Stay Loose.