How to Save Money from Each Paycheck
With around 78% of American’s living paycheck-to-paycheck*, it’s important to develop habits that allow you to save. When you want to learn how to save money from each paycheck, you’ve already made a positive step. Once you’ve made the decision to begin a savings account, the next step is to create a plan to build that account and contribute to it regularly. There are many resources online and at your bank that can provide ideas on how to save and we have a few of our own. Here are just a few ideas on ways to begin building the balance in your savings account:
- Before building your savings account you need to look at your monthly budget to determine if you are making enough money to cover your expenses. If you find that you are struggling to make ends meet each month you’ll need to work on managing your debt and getting your expenses under control first.
- Once you have debt under control create a savings plan. A plan will help you be accountable to yourself and your money. Your savings plan might consist of a dollar figure at the end of a period of time, or even a goal just to save a certain dollar amount each month. Your savings plan might also include saving for a much-anticipated purchase or vacation trip. Whatever the plan is it is important to write it down so that you can be accountable to meeting it.
- Create a savings account you can deposit to. A good recommendation is to have your long-term savings account at a different financial institution so that you cannot easily access the money.
- Determine exactly how much you’ll need to save each year, each month, each week, or even each paycheck to meet your goals. Breaking your financial goal down makes them more manageable and more easy to understand.
- Once you’ve set the goal you need to determine how you will go about meeting this goal. One of the easiest ways to do this is to save a portion of each paycheck.
- You can do this by first creating a budget that breaks down all of your bills and expenses and assigning them to pay periods. This allows you to not only specify a savings amount but also allows you to see how the rest of your paycheck should be spent.
- Find out if your employer offers a savings plan such as a 401K or retirement plan you can invest in. This investment takes money from your check before you even see it and puts it into your savings plan account automatically.
- Work with your bank or credit union to have funds automatically diverted from each deposit to a designated savings account.
- If you don’t save automatically from each paycheck determine just how much you should be saving and manually deposit that amount after each payday.
The important things to remember are to set a goal, create a plan, and work consistently towards making it happen. It’s important to create realistic goals that you can stick to and choose wisely with all of your purchases. By creating smaller, actionable steps, you will eventually start to understand how to save money from each paycheck and develop new ways of your own to help you save.
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