Saving money is a daunting task… at first! Having savings gives you the comfort of knowing you can handle job loss, health emergencies, or even opportunities, should they arise. Below are a few tips you can implement to start saving today.
- Put it on Autopilot
There is a reason this is the first item on this list. Automating a recurring transfer from your checking account to a separate one (either brokerage or savings) is the single best thing you can do to save money. Its also extremely easy. Most banks offer some sort of automatic recurring transaction feature. If they don’t, you can always call your local banker who may be able to set one up for you. - Small steps
Unfortunately, savings accounts have trivial interest rates. I prefer to use the automatic transfers to deposit funds into a brokerage account where I can invest the funds as I please. For a more turnkey solution, I suggest Acorns. With the Acorns app, you can easily link your bank account and set up an automatic recurring draw. The app gives you 3 different frequencies as per how often the recurring transactions will occur (daily, weekly, or monthly).
Personally I prefer daily transactions, this allows you to set a goal for the month and really break it up into small pieces in order to make it seem less daunting. Instead of transferring $1000 once a month, transferring $33.40 per day is more manageable, and allows for a higher amount of cash to remain in your checking account should something urgent come up. - Live within your means
Nowadays with the constant barrage of targeted ads on social media, spending money is easier than ever before. Ensuring you pay off your credit card monthly is not only a good habit of saving money on interest, but it also serves as a reminder to check how much you have spent. Credit cards not only charge you a high rate to borrow funds (often above 20%+), but having access to easy credit is sure to encourage excessive spending as well.
While these habits won’t make you rich, developing these habits early can help you succeed in your financial goals moving forward. Once you have a small emergency fund set up (usually 3-6 months of expenses) its time to start making your way over to investing section to learn more on how to grow your wealth!
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