Saving money is everyone’s goal, but how can we do that? Costs add up fast, and it can seem like setting money aside is a dream. But even the smallest amount can lead to big rewards.
Most financial experts recommend having between three to six months’ salary set aside to 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.
Those can seem like unattainable goals, but there are simple ways to get started. Remember, you’re not going to save six months’ worth of income in a few weeks. This takes time, so be patient and keep it up.
Here are four easy steps you can take to start putting money aside into your savings.
It’s a rule of thumb to put 10 to 15 percent of your income into your savings account each month. But let’s be realistic -- for some of us, that’s not doable.
Instead, save what you can. Even if it’s just one percent of your income, deposit that into your savings each month. It’ll not only build up your savings, but doing so will also get you in the habit of putting money aside for the future.
Even a little bit is better than nothing.
If you’re not aware yet, we’re big on budgets. Making a personal budget is a key step in reaching both your long-term and short-term financial goals. By knowing what expenses are necessary -- such as rent, groceries, utilities, etc. -- and which are luxuries -- eating out, entertainment services, etc -- you’ll get a better idea of where you stand financially and what you can cut.
Take a look at your budget. Do you have any money left over at the end of the month? Put it in a savings account! Can you cut an expense that you don’t really need or a streaming service you don’t really use? Put that money in your savings!
If you still need help putting together a budget, check out KOFE’s library of budget-related resources. They are free for La Cap members!
Get rid of the hassle of making savings deposits yourself and set up automated transfers from your checking to savings account each month.
After you create your budget in step 2, you’ll have a pretty good idea of how much money you can comfortably transfer to savings each month. By automating the savings, you’ll eliminate the temptations to spend that money on unnecessary things.
When a little unexpected cash comes your way, don’t rush out to spend it. Build up your savings account by depositing that extra money.
Tax refunds, work bonuses, or that $20 bill you found in your laundry will increase your savings without affecting your daily budget. This step will also keep you from spending that money on impulse buys that you don’t really need.
There’s another perk of saving money at La Cap. We offer competitive rates on checking and savings accounts that will let your money grow with you. Take the next step to improve your financial status and explore our member savings services.