Saving Strategies – 5 Steps to Get You Started

Posted by Ali Lawrence on Sep 9, 2013 in Business, Tips & Lists |

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Today’s guest blogger, Jenny, has worked in the financial services industry for the past 10 years. In her free time she writes a health & wellness blog called The Wellness Journey.  She has been featured on ToscaReno.com ; Healthylivingblogs.com ; and as an ambassador for Fitmarkbags.com.

Saving Strategies – 5 Steps to Get You Started

I found out the hard way in college the importance of staying within a budget. I moved out of my parent’s house at the age of 18, worked full-time, and went to college part-time. It seemed like the minute I paid for my tuition the credit card offers started rolling in.

Paying for college, books, supplies, and putting a roof over my head was something I stressed about regularly, and before I knew it, paying for that pizza delivery with my credit card became a way of life.

It’s a trap that can be fallen in to quite easily at a young age, and once there, it’s quite difficult to get out.

The sooner you make a habit of creating and maintaining a budget, the better off you’ll be.  Remember, everyone has to start somewhere, and usually starting is the hardest part. It’s also the biggest step in the right direction.

As a general guideline, it’s recommended that you have 3-6 months’ worth of expenses in a savings account for emergency situations. That sounds like a huge undertaking, but here are some steps to get you started. These are great for those just starting out, as well as a nice refresher course for all of us.

1. Keep a Journal –

People  that write down their goals are 75% more likely to achieve them. Use a journal to write out specific goals for your finances. They could be as simple as, “I want to save $5.00 a week”, to something as complex as, “I want to save for a down payment to buy a house”.

Now that you’ve written down your goals, use the journal to track everything you spend for the next 2-3 weeks. That means everything- your daily Starbucks addiction, that pack of gum from the vending machine at work, gas…..you name it.

Or you can check out this site for the Top 5 Budget & Finance Apps for iPhones and do your journaling on your smart phone.

2. Analyze Your Data –

Now that you’ve written down or logged your spending habits over the past two weeks it’s time to take a good hard look at where you can trim things down. Perhaps it’s less trips to the coffee shop in the mornings for that latte. Or eating out less and packing more often for lunch.

You wouldn’t think it amounts to much, but a $3.00 cup of coffee 5 days a week adds up to $780 over the course of a year!

3. Determine a Comfortable Savings Amount –

Once you’ve had the chance to look at places where you can cut down on your spending, it’s time to determine an amount you’re comfortable with saving on a monthly basis.

Some of your bills can fluctuate on a monthly basis, (i.e. your utilities, amount spent on gas) so you’ll want to take that in to account when you’re determining the amount you’ll set aside. Keep in mind that every little bit helps! Even if its $20 every other week, that adds up to $520 in the course of a year.

4. Pay Yourself First –

Treat your pre-determined dollar amount like it’s a monthly bill. This way you’re sure to set those funds aside. Just like we make a date with ourselves to go to the gym, make a due date to pay your “bill” to your savings.  Put it in a savings account that you purposely don’t have tied to a debit card or automatic transfer in to your checking account.  I like using online banks such as CapitalOne 360 or Ally. They remain completely separate from your “every day” accounts and aren’t as easy to get to on a whim.

5. Give Yourself a Raise –

More often than not during the course of a year in any given profession, you’ll usually have at least a cost of living increase, perhaps you even get promoted. As those increases in pay happen, so should the amount you set to put aside in savings.

Times can certainly get tough, and saving money doesn’t always come easy. Being mindful of your spending habits and putting funds back little by little gets you headed down the road to being financially comfortable. Just remember to have faith and stay the course. You’re worth it.

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