Savings Plans
Studies show that we are saving fewer and fewer dollars each year. Our conscience tells us to save for the unexpected. But how much should we save? And how do we go about saving it?
The Beginnings Of A Savings Plan
Saving For A Rainy Day
You Gotta Have Goals
Pay Yourself First
The Beginnings Of A Savings Plan
The first step to a good savings plan is to construct a budget. Make a list of all the bills you pay each month, including purchases for coffee and other extras. Evaluate your list to determine what you are currently spending and how much you can save. Can you cut any of these expenses to increase the amount you want to begin saving?
Saving For A Rainy Day
Experts recommend three to six months of living expenses should be saved first and foremost for emergencies. This ensures you will have a nest egg to live off of should you unexpectedly find yourself out of or unable to work.
You Gotta Have Goals
With your emergency fund in place, you can look to the next step – setting goals for your savings plan. What do you want to accomplish with your savings? Make a list of goals that fit your needs and wants and assign a dollar amount to each of them. Include in your list a timeframe in which you wish to accomplish your goal. Next, group them according to short term or long term status. Saving for new furniture, for example, would be considered a short term goal whereas saving for retirement would be classified as long term.
Pay Yourself First
The easiest approach to saving money is to take a percentage of your income and put it away each time you get paid. If your employer offers direct deposit, request a specific dollar amount be funneled straight to your savings account, and the rest to be deposited into your checking account. Money that you do not see is often times money that you do not miss. If you usually receive a tax refund each year, add all or a portion to your savings. If you receive a raise from your employer, take the additional amount and put it directly into your savings. You will be amazed how quickly it all adds up. Savings Plans require both discipline and dedication, but reap great rewards.
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