An adequate savings account can rescue consumers from immediate financial hardships during a job loss, a major illness or other disruptions of income. We recommend starting a savings account today no matter how small the amount is that you can afford to put into it every month. Here are some other tips to help you get started saving:
Set savings goals.
This will help motivate you to start saving. Develop both longterm and short-term goals. Long-term goals might include college tuition or retirement. Use short-term goals to set up a holiday spending account or to save for a quick trip to a fun place you want to visit.
Treat savings like a bill.
Once you’ve set your goals, determine the amount you can afford to put away on a regular basis. By building regular savings into your budget, you are able to pay yourself first. When you sit down to pay your bills, make your savings bill the very first one you pay.
Be ready for emergencies.
Having an emergency savings fund of three to six months’ “bare bones” living expenses will prove invaluable if you lose your job or face a medical crisis. This is also the fund you can go to if your car breaks down or the washing machine goes out.
Save new money.
When your income increases, through raises or bonuses, commit to saving part, if not all, of the increase. Ultimately your goal should be to save 10 percent of your income each year.
Take advantage of employee benefit plans.
If your company offers a 401(k) or similar plan with an employer match, be sure that you are saving the maximum amount to receive the full benefit of employer-matched savings. IBI