Money Saving Guide
There are many ways to start saving money now to have a wealthy future. Its not just a technique its also a mindset. You must be mentally locked into your goal of saving money and getting out of debt. Listed below is a guide to saving money. Think of our guide as a procedure, something that needs to be acted on daily.
Here are the 3 platforms you need to start saving money in.
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Saving an emergency fund
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Saving for a big purchase
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Saving for retirement
Saving an emergency fund. What is an emergency fund? Its 3 to 6 months salary in an account for any type of emergency. This must be done first before any other accounts are started. Emergencies vary from the refrigerator going bust or ultimately losing your job. If you have this savings put away these emergencies will not hurt, you as hard as if you didn’t have this account.
How do you start saving your emergency fund? First start with your goal number. If you take home $1000 a month your emergency fund will have a goal of $6000. This isn’t a one-time payment this can be done over time. This is where we must start changing your mind about money. It’s called pay yourself first. Most people pay bills and rent before they even put a dollar away for their future. We need to stop this right away. Their budgets are usually what is left over. The new budget should be pay yourself, then bills. What is left over is your spending money. This all comes down to budgeting. If you fail to plan, you plan to fail. Get all of your bills and liabilities written down. This is the money going out. Add them all up and deduct that from your net pay. Take a percentage of the money left over and deposit that into an account you can access easily if an emergency shows up. This is when you start building your emergency fund. Set a small goal at first like I need $1000 in 3 months. And reward yourself for hitting that goal with a small present like a favorite dessert. Remember we are saving money so do not go out on the town if it can affect your savings.
Saving for a big purchase. The American dream is owning a house. This can possibly be the biggest purchase of your life. You want to start saving for this purchase only after you have your emergency fund fully funded. Big purchases also include a new car or even sending your children to college. This savings is started after you have built your emergency fund. The money you were putting away for your emergency fund can now be directed to this account. Set quarterly goals and hold yourself accountable to saving money in this account. Take notes on why you did and did not invest in this account. Learn from your mistakes. This is your money make sure its going to the right place.
Saving for retirement. This should be started the second you enter the workforce and start making a salary. Do not worry if you didn’t its never to late to start investing into your retirement. The advantage to retirement savings is compounding interest will work in your favor. Compounding interest needs time so make sure you take advantage of the time. There are many ways to contribute to your retirement. There are programs live 401k, IRA and Roth IRA. We believe in multiple streams of retirement income. If you have the opportunity fund them all.
Here are a few more tips to saving money:
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Always see if there is a coupon or coupon codes
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Don’t carry a lot of credit card debt. If you can’t pay cash think about the purchase
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No spontaneous spending
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Bring lunch to work a few times a week
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Make your coffee at home
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Cooking your own meals is cheaper than take out
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Shop smart
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Always ask yourself do I really need it
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Create a budget and stick to it
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Don’t use ATM’s that aren’t from your bank
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Make homemade gifts
Remember you must take control of your money. Do not let it control you. Making the smart and economical decisions now will lead to a more financially stable future.
