Six Steps to Smart Saving
These days, in our world of instant gratification, it’s more important than ever to stay focused on saving money any way you can, even though it’s not always easy. But to help you monitor your spending habits and cut expenses, Country Bank has put together a step-by-step guide that can assist you in developing a realistic savings plan.
- Keep track of your expenses
The first step in saving money is to recognize how much you’re spending. For one month, try to keep a record of everything you spend. Once you have your data, organize these prices by category—for example, gas, groceries, mortgage, etc.—and get the total amount for each.
- Set a budget
Once you have a good idea of what you’re spending each month, you can build a budget to monitor your spending, limit over-spending and how much money to put away in an emergency savings fund. Having an emergency savings fund lessens the likelihood you’ll have to take out a loan or max out your credit cards. However, when building up an emergency fund, be on the lookout for unexpected savings.
- Plan on saving money
You always want to take into account your monthly expenses and earnings. Create a savings category within your budget while trying to make it at least 10-15 percent of your net income. If your expenses don’t allow you to save that much, it could be a sign to start cutting back. If this is the case, look for non-essentials that you can spend less on—for example, entertainment and dining out—before thinking about saving money on essentials like your car or home.
- Set savings goals
Setting savings goals makes it much easier to get started. Start by deciding what you really want — buying a home, paying off a loan, or saving for something special. Then you should decide how long it will take to reach each goal, typically it should be a 1-3 year plan setting different deadlines for each. Finally, each goal should involve a specific amount and a plan. For example, if you want to save $600 in five months for a new TV that means saving $120 each month, which could mean packing lunch a few times a week.
- Try using automatic transfers
Automatic transfers to your savings account can make saving money much easier. By moving money out of your checking account, you’ll be less likely to spend money you wanted to use for savings. There are many options for setting up transfers that you can control, like how often you want to transfer money and which accounts you want to use for the transfers. You can even split your direct deposit between your checking and savings accounts to add to your savings with each paycheck.
- Watch your savings grow
Check your progress every month. Not only will this help you stick to your personal savings plan, but it also helps you identify and fix problems quickly. With these simple ways to save money, it may even inspire you to save more and hit your goals faster.