Published on February 18, 2021
You’re Ready to Start Saving
You’ve realized that you’re ready and able to start saving. That’s a great first step in providing for your future.
Having enough disposable cash to set some aside in a savings account isn’t always easy. So congratulate yourself.
Now that you’re on your way to saving, how much should you start setting aside?
Although there’s not one specific answer to that question, start with considering your income, your monthly bills, and your lifestyle.
Start by adding a new monthly bill
A good first step is to take a look at your monthly expenses, and then add a payment − to yourself. That’s right, you are now a monthly bill that must be paid. Not figuratively. Literally. Add yourself as a monthly payment to your outgoing bill payment schedule and have the money go straight into your savings account. You must pay yourself. If you get in a situation where you’re low on money, don’t automatically sacrifice yourself. Look for other ways to cut back first.
How fast do you want to see progress in your savings
Let’s start with a relatively simple goal: $25 per week. That’s $100 per month and $1,200 per year. If you want your savings to add up more quickly, you’ll probably have to make some small sacrifices to your lifestyle and get that number to more like $200 per month. These changes do not have to be drastic.
Maybe you don’t need three movie streaming services and two music subscriptions. Cut that back to one of each and you’ve saved an additional $50 per month, at least, without really trying. While you’re at it, take a look at your cable bill. Do you need all those premium channels if you have streaming services? How much do you spend on other indulgences, like specialty coffees and carry out?
Be realistic about your monthly expenses. You will know where you’re overspending. Make the necessary adjustments and add that amount to the total amount you’re paying yourself.
Keep increasing your savings
As your career progresses and you start making more money, make sure your savings increase with it. Think about putting any extra money that comes into your possession straight into your savings. You don’t need to increase your spending because you suddenly make more money. Keep your lifestyle the same and increase your savings.
Easy additions to the payment to yourself:
- Yearly bonus
- Tax refund
- Yearly raise
- Overtime pay
All of these things can add up. Before you know it, your $100 per month in savings has turned into $200 and then $300, and now you’re really starting to save. Plus, your bills are paid and your lifestyle has remained relatively the same.
Not enough left over to save?
This situation is very real for most people. Considering that 53% of Americans live paycheck to paycheck, extra money is hard to come by, but that doesn’t mean you have to put off saving. This is where your tax refund or your raise comes in handy to build your savings.
For some, the urge to change your lifestyle as your salary changes is just too great. You really want a new car, and now you can afford it. You splurged on a vacation, and now you have a ton of high-interest credit card debt. You want to enjoy the finer things in life.
All of these scenarios are common. But if you want to save, perhaps your old car is just fine.
High-interest debt can break any savings plan, so this really needs to be addressed in some fashion right away. You can start by taking that high-interest debt and transferring the balance to a low or no-interest credit card. Even if it’s only for 12 months, that’s interest that you can now pay yourself or used to pay down your balance.
The need, or want, to enjoy your life is understandable. This is where your priorities come into play.
You. Are. Important. Pay yourself like you would your electric or cable bill and keep adding to that amount whenever possible.
You don’t have to give up all the finer things in life to save, you just have to figure out what truly matters to you. If $25 per week is what you can afford, then start there. You are on your way to better savings habits and more financial stability. Whatever the amount you start saving, you won’t regret it and you’ll be surprised by how quickly your balance accumulates!
Community Choice has a great way to reduce your high-interest credit card debt. From March 2021 through March 2022, qualified members can receive 2.75% APR and no fees on balance transfers. Our Visa Platinum card is another good choice if you’re considering consolidating high-interest debt. Click here for a look at our credit cards. For more on our balance transfer offer, call us at 877.243.2528 and speak to one of our personal advisors.