| Studies show that we are saving
fewer and fewer dollars each year. Our conscience tells us
to save for the unexpected. But how much should we save? And
how do we go about saving it?
The Beginnings Of A Savings Plan
The first step to a good savings plan is to construct a budget.
Make a list of all the bills you pay each month, including
purchases for coffee and other extras. Evaluate your list
to determine what you are currently spending and how much
you can save. Can you cut any of these expenses to increase
the amount you want to begin saving?
Saving For A Rainy Day
Experts recommend three to six months of living expenses should
be saved first and foremost for emergencies. This ensures
you will have a nest egg to live off of should you unexpectedly
find yourself out of or unable to work.
You Gotta Have Goals
With your emergency fund in place, you can look to the next
step – setting goals for your savings plan. What do
you want to accomplish with your savings? Make a list of goals
that fit your needs and wants and assign a dollar amount to
each of them. Include in your list a timeframe in which you
wish to accomplish your goal. Next, group them according to
short term or long term status. Saving for new furniture,
for example, would be considered a short term goal whereas
saving for retirement would be classified as long term.
Pay Yourself First
The easiest approach to saving money is to take a percentage
of your income and put it away each time you get paid. If
your employer offers direct deposit, request a specific dollar
amount be funneled straight to your savings account, and the
rest to be deposited into your checking account. Money that
you do not see is often times money that you do not miss.
If you usually receive a tax refund each year, add all or
a portion to your savings. If you receive a raise from your
employer, take the additional amount and put it directly into
your savings. You will be amazed how quickly it all adds up.
Savings Plans require both discipline and dedication, but
reap great rewards.
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