Getting Started with Savings

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If you are trying to be more intentional about saving for the future, the hardest thing might be getting started. Luckily, there are several ways you can create a realistic, simple strategy that will allow you to set aside money for both long and short-term goals.

Cut Expenses and Increase Income

If you spend too much money to save that much, you might want to cut back a bit. Identify the things you can spend a bit less on, including nonessentials. For example, look for free forms of entertainment, such as finding media from the library and attending free, local events. Cancel any memberships or subscriptions you no longer use, and eat out less than once a month. To increase your income, you might want to pick up some extra work outside of your full-time job. Look for something you can do online, since it will give your more flexibility and allow you to pick up as many hours as possible.

If you have a life insurance policy, you can consider selling it through a life settlement. You can review a guide about everything you need to know to get more instead of surrendering the policy. You can then invest the funds you gained from the sale. Once you know how much you spend each month, you can organize everything into a budget. Organize it by mortgage or rent, gas, groceries, and other bills. You can use an app or spreadsheet to help you start. Your bank might even offer one so you can stay on track.

Reviewing Your Progress

It’s a good idea to set up automatic transfers from the checking account to your savings account. You can then decide how much to transfer and when to do so. Or you could have your direct deposit split so some of each paycheck goes into savings. This can be an effortless way to get your finances in order because it is essentially a one-time set up, and once the money is out of sight and out of mind it will continue to build without you having to tend to it.

These are both great ways to automatically save money because you do not need to think about this. It also reduces your chances of spending the funds instead. You will still want to keep an eye on things to ensure everything is going well. Look over your budget and your progress every month. That will help you stick to your plan to save as much as possible. Plus, it allows you to fix issues quickly. Understanding how to save can help you meet your goals even sooner.

What to Do with Your Savings

It’s a good idea to put your money someplace where it can earn interest. If you have a fairly short-term goal, you could look into a certificate of deposit (CD), which keeps your money in savings for a certain amount of time at a higher rate. Savings accounts are good for your emergency fund because you can access the money at any time without penalty. For longer-term goals, look into mutual funds or stocks. These are available through brokers with investment agencies. The FDIC does not insure them, and the bank does not guarantee them, so they come with certain investment risks. But the returns could be much higher. It’s a good idea to split your money among multiple places.

 

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