If your car broke down today, would you have the funds to get it fixed quickly? If you couldn’t, you are not alone. In a recent survey conducted by the Federal Reserve, 47 percent of respondents stated that they would not be able to come up with $400 in the case of an emergency unless they borrowed or sold their belongings. As of 2016, 66 million Americans had no savings at all.
One common reason that people attribute to not saving money, is that they do not make enough of it. It is understandable that the less income you bring in, the less wiggle room you may have to sit money aside. Still, anyone can save money regardless of their income level.
Saving money is not everyone’s favorite thing to do, but simply look at it as you paying yourself. You deserve to keep a portion of what you may have earned or been given for yourself. Having a cash reserve gives you breathing room in the event of emergencies, job loss, or any other unexpected occurrence that could effect your finances. Along with the cushion that having extra funds stashed away gives, it also helps combat stress caused by finances, the number one stressor for Americans, which is beneficial to one’s health.
Before you can save money, however, you should know your financial situation. You should take the time to thoroughly evaluate how much money you have coming in, and how much money you are spending. This is something that can be done quickly, and will likely put your spending habits into perspective. If you subtract your expenses from your income, and have a positive amount, then you’re on the right track. From here, determine an amount from the money you have left to put aside, even if it is only $5.
If you take a look at your finances and have more expenses than income, then you should look for areas in which you can decrease your spending. Don’t worry. It seems scary, but if you think hard about all the things you buy, you will probably find things that can easily be cut out. Do you buy things that aren’t needed on impulse often? Stopping for coffee at every cafe you see? Spending small amounts often eventually adds up, so if there are no major expenses that you can eliminate, start by cutting back on small, everyday expenses.
Everyone’s financial condition is different and there is no blueprint for saving money. Some will set a monthly savings goal while others may find it easier to put a portion away as soon as they receive any money.
Below are a few savings tips to make saving easier and help you stay on track!
- Make a realistic budget
- Set specific savings goals
- Keep savings separate from other accounts
- Set up automatic transfers
- Cut out spending on non essential items
The most important things to remember are that every amount makes a difference and that it takes time. Find what works for you, stay consistent, and watch the amount grow!