Does it seem like saving money is a luxury you can’t afford? Do you have good intentions to save, but unexpected needs always seem to arise? Are you counting on your “future self” to come to the rescue?
You’re not alone. According to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households, 40% of adults feel they don’t have enough saved to cover a $400 emergency. Many of us are familiar with financial stress like this. Luckily, there is hope.
Here are ten tips to help get you started in the right direction. Similar to losing that extra ten pounds, saving takes commitment and dedication. You’ll need a plan and you’ll need to stick with it. Will it be easy? No. Is it worth it? Yes! Your future self will thank you.
1. Set Goals
Take a few minutes to think about your life goals. Picture your life in the short term (1-3 years) and the long term (4+ years). Think about what kind of future you want for yourself and your family. Setting goals helps you prioritize how you use your money so it goes toward what matters to you.
2. Be S.M.A.R.T.
Now that you know your goals, make sure both your short and long term goals are based on your values and are SMART: specific, measurable, achievable, relevant, time-bound
3. Track Expenses
Keep track of your expenses for a set amount of time (at least one month). You might use the envelope method where you allocate a set amount of cash for the month in envelopes for different categories, or use a spreadsheet to keep a record of your receipts and transactions.
4. Make a Realistic Spending Plan
With your values and goals in mind, create a realistic spending plan. This tracks the flow of your money in and out, determining areas you may be able to cut back or cut out.
5. If You Can’t Spend Less...Make More!
Look for ways to increase income by thinking creatively. Ideas include selling items online or finding a side gig to earn extra money.
6. Build An Emergency Fund
Create a safety cushion for unexpected expenses like car repairs, job loss, or illness. A good rule of thumb is to save at least 3 months of your basic living expenses, but start wherever you can and keep adding to it.
7. Save For Retirement
The sooner you set up a retirement savings account, the better, thanks to compounding interest. Check to see if your employer offers a 401(k) plan and take advantage of any matching funds they offer. If you are self-employed, talk to your bank, credit union or financial advisor about an IRA (Individual Retirement Account).
8. Choose A Savings Vehicle
Once you determine your savings goals and needs, you can determine the best type of savings account for you. Federally insured financial institutions are a safe place to keep your money. Your deposits in a federally insured credit union are insured by the NCUA to at least $250,000.
9. Make It Automatic
There are many ways to take the willpower out of saving. Set up an automatic transfer from your paycheck to a savings account so that you eliminate the temptation to spend the money elsewhere. With this approach, you’re paying yourself first. Is there anyone more deserving of your hard-earned money?
10. Work With a Qualified Professional
Managing your money can be complicated and feel personal. Thankfully, there are many qualified professionals to help you at every stage of your financial journey. Find a financial professional you trust for the long haul because your financial goals are likely to evolve over time as circumstances change. You may need help with life’s milestones such as career change, marriage, home ownership, a growing family, college planning, inheritance, retirement and more.
Genisys Credit Union has Investment Professionals available to help you with short and long term savings goals. To learn more about saving and other financial topics, visit our partner, Greenpath Financial Wellness.
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Source: GreenPath Financial Solutions