So maybe you live paycheck to paycheck. If you do, then you more than likely have no savings built up. One of the keys to building a good savings is to start small. Don’t be distressed if you think you should have more savings! Saving money takes time. We still have to eat, pay for rent, gas… The list goes on and on. Keeping a savings has many benefits: If you suddenly find yourself in need of a large purchase, then having money saved up severely lessens the blow. Keeping some money saved up on the side is almost integral to certain things such as owning a car. Cars break. Parts need to be repaired. And car parts are certainly not cheap.
Having a savings can also save you if you lose your job. A healthy practice is to have a completely seperate savings for in between jobs. Typically, if you quit or lose a job and don’t have another career lined up already, it takes about three months to get into a new one. The target for that is to have three months worth of income saved up so that you can keep paying your bills and living normally while you recover.
However, don’t be distraught when you don’t have that much saved up! You have to start somewhere, right? Like all ways of dealing with money, having a plan is important. You need to budget the way you spend your paycheck, right? The same goes for building up a good savings. To start your savings, choose a good, attainable amount that you want to have saved up. A good place to start is to try to have at least one paycheck’s worth of money (typically two weeks of regular wages) in savings. If you can do that, then you can do one month, right? That’s usually only about two paychecks worth. Just build it up little by little, you don’t need to dump half of what you earn straight into savings. An easy way to save is to take a trivial amount of your paycheck out as soon as you get paid. AFCU offers a product called the Dedicated Savings which required a minimum deposit of $10 per month. If you set it to automatically draw $10 from your account on a monthly or bi-weekly basis, you’ll never feel it leave you and in no time flat you’ll have quite a chunk of change saved up, hassle free!
Do you have a savings? No? No worries! Just start with something small and keep adding to it. It’s kind of like cultivating a tree… Just put a little bit of effort in here and there, and soon you’ll have fruit. In this case, it’s money growing on the proverbial tree.
Tags: dedicated savings, money, Savings
Even if you start out small, your savings are going to build like a snowball. (I think we already talked about that…) So, start now! It’s never too late to start putting away money for a “rainy day”.
i’d say aim for putting 10% of every check into a savings account. and once the savings account is large enough to live on for 3-6 months begin to explore other options like mutual funds. an index fund is usually a pretty good bet most have small administrative fees, which means more of any gains would goto you. utilizing an online discount brokerage is a good idea too, they usually have small fees. be sure to read all the terms and conditions though and shop around. in an ideal world i’d have my savings account, and then an online brokerage account in which i’d switch back and forth between an index fund and bonds depending on economic conditions.
This is a great idea. Because of economic times my dad lost his job a few years ago, they didn’t have savings. It took him about 6 months to get a new job. My parents used credit cards to get by. As soon as he got his new job they worked at paying off the debt they occured. Soon after that they implimented this idea. Again earlier this year my father lost his job. This time instead of credit cards they had savings to use. It was great, besides the fact that he had to look for another job. Luckily he just found employment again. This time instead of paying off credit card debt, they are building up their 6 months of saving again. I LOVE SAVINGS!!!!
Hey cody, thanks for the advice. Do you know how much you have to have to put money into a mutual fund? It would be nice to invest money, but I don’t know if I have enough…
Good advice, some people don’t bother saving at all b/c they think if they only have a little, then it’s not worth it! Starting small is a great step to saving bigger!
I put 10% into a dedicated savings and then just a little in regular savings for emergencies. Just putting 10% away can build fast.
I think that this is some really good advice!! Especially with the way the economy is! My husband has been out of work for almost a year and having a savings has helped supplement the fact that he is no longer bringing in money.
Good advise! savings is the way to go! I got married about a year ago and the first 2 months being married I lost my job and looked for one for about 2 months and if it wasnt for our savings I dont know where we would be right now! Highly reccomended!!!
Saving definitely can be intimidating when you have nothing. But the key really is to start small. The “Dedicated Savings Accounts” are awesome and so easy to start up.
I took a finance class in college a few years back and the professor really stressed starting an IRA or retirement fund AS YOUNG AS YOU CAN. And the thing is, you can find a plan that lets you start out with as much as you have. He called it the $11 portfolio. Some funds make you deposit at least $500 or more to open, but there are some that don’t. The key is to get into the habit of saving young. A little bit often REALLY does make a difference
Pennies add up fast.
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