Stop the excuses, and learn how to save money every paycheck!
It’s easier to learn how to save money every paycheck than you might think. Even people who are scraping by have ways to cut their bills and put money into savings. Those emergency funds really help in a pinch, so get serious about setting money aside for future troubles.
Here are a dozen super-simple ways to make saving a part of every payday:
Make savings automatic.
Saving money is a habit, and it’s hard to start at first. There’s a lot of fear in watching a bank account balance drop, regardless of whether those funds are being safely stored somewhere else. Get used to it faster by making contributions automatic, so the balance you see in your checking account is after the savings has been taken out. It will only take a few weeks to get used to your new balance.
Automate your savings by enrolling in employer-sponsored retirement plans and splitting your check deposit between multiple accounts.
Make savings hard to access.
People who are new to saving money are apt to dip into those funds whenever something comes up instead of waiting until there’s an emergency. A savings account is not a checking account. If you want the long-term benefits of saving money, you need to learn to keep your hands off.
Set up a savings account at a new bank, and forgo a debit card. Having to go to the bank to withdraw money provides you with a chance to really think about whether the money is needed.
Employer-sponsored retirement plans are especially helpful in this area. Early withdrawals result in big tax penalties, but the money is not completely inaccessible before you retire. After you’ve had an account for so long, depending on your employer’s savings plan, employees can take loans on the funds. However, the process can take a week or longer, which is plenty of time to reconsider.
Make future plans.
Saving is never so efficient when there’s a goal in mind. Start out with short and long-term savings goals, and make them a challenge. Whether you’re working toward a family vacation or putting aside 6 months’ worth of bills, reward yourself when you reach your milestones.
Personal finance contests are also a good way to kickstart your savings habits. Check out the latest and greatest at Budgets are $exy. Even those on the tightest budgets can take part in a pocket change challenge. The key is get used to putting something away for the future every single time you get paid. You can worry about ways to increase those contributions once the foundation for your savings has been laid.
Make savings really pay off.
Some savings plans pay interest, while others have the potential to raise your balance based on stock performance. Earning money through savings can be tricky business, but there are plenty of resources online and in-person to help you learn the ropes.
One very secure way of growing your savings is by contributing to an employer-sponsored savings program, like a 401(k). According to the Bureau of Labor Statistics, roughly 80 percent of employers have a retirement plan. Over 95 percent of those employers match a portion of employee contributions. If you contribute 5 percent of your pay to your retirement savings, for instance, your employer may contribute 2.5 percent of your paycheck to your savings plan. Ignoring a 401(k) is the same as refusing free money!
While you’re learning how to save money from every paycheck, don’t forget we’re here to help! Visit your nearest Title Tree store for more tips on spending less – or if you need a little help making ends meet right about now.