Are you a saver or a spender? If you lost your job, would you have enough savings to get your through six months of unemployment? Six weeks? Six days? Six hours?
A survey by Bankrate.com reported that fewer than 25% of Americans have enough money saved to cover a minimum of six months of expenses. Half have less than three months of expenses saved and 27% have no savings at all.
Kathryn Crumpton is the manager of the Aurora Center for Financial Wellness.
So where are you with saving money? If you have been reading my blog for a while, you know how I feel about saving money – if you are going to be successful with money, you have to be a saver. Since many of us tend to live pay check to pay check, the easiest way to save is to not have the money in the first place. Have your payroll department deposit an amount to a savings account every pay period and leave it there. If you think you will save whatever is left over at the end of the month, you will find that there is usually little to nothing left over.
A little more than five years ago, about the time I got a raise, I decided to put $50.00 a pay check into a savings account at our credit union. Originally I thought I would use the money for holiday gifts. The holidays came and went and I didn’t need to take money out of the account so it just continued to grow. After a couple of years of savings, I moved most of it into a one year certificate of deposit. Still I continue to save and when I checked my statement yesterday, the amount had grown to just under $7000.00. It has really been an “out of paycheck, out of
mind” savings account.
Here are a few tips to get you started with a savings account:
- Take advantage of payroll deduction for a regular savings account and for retirement savings. Start small and try to increase the amount each year.
- If you can afford a $40,000 car, buy a $25,000 car and save the difference in car payments.
- Don’t buy today what you can live without tomorrow. Just because it’s on sale doesn’t mean you need it. Be able to separate what you really need and what you merely want.
- Brown bag a lunch rather than eating out. Give yourself the tip you would have left in a restaurant and start a “tip jar”.
- Soda/snacks from home are cheaper than soda/snacks from a machine.
- Take a look around your home, attic, garage and basement for items you no longer want or need and consider selling them in a yard sale or online. Use the money to start a savings account.
- After you have paid off a debt, take the money you were using and put it into a savings account. For example if you were paying $50 on a credit card bill each month and the card is paid in full, put the $50 into a savings account.
- Buy a home that is less than what you qualify for and pay extra each month to pay it off sooner. Let the equity in your home build and resist the urge to use your equity like a piggy bank.
These are just a few ideas to get you started. I am interested in any additional ideas that you have.
Even if you are not struggling with debt, the chances are you know someone who is. We can help families live well again. Call 1-414-482-8801 or visit our website .
Category: Personal Finance