4 Steps to Build Your Savings
How to start today
A savings plan may be daunting, when it isn’t difficult, just takes commitment. Analyze where you are in this moment, and picture where you want to be. However, having a plan is essential, and there are many benefits to opening a savings account now.
There are advantages for first-time openers, and a savings account helps secure money for a rainy day, teaches one to be more self-reliant, and builds wealth over time. Here is how to get started.
Step 1: Analyze where you are now.
You aren’t expected to have a lot of spare cash tucked away at this moment, or a large plan in place straight away, so do some research on where you are right now. Check your previous few months of bank statements to figure out a realistic initial plan. If you use all or most of your paycheck, starting by putting away a small amount is more practical.
Step 2: Have a savings goal – both short term and long term
Having a goal in mind helps you want to save more instead of spending your money. There are both fun goals to save for, like a vacation or a home remodel, and more serious, necessary life goals like retirement and emergency funds. If you are saving for retirement or your child’s education, consider putting your money into an investment account like an IRA or 529 plan. If you tend to splurge or ever have the urge to dip into the account, ask your friends and family to hold you accountable by sharing your goals with them.
Step 3: Automate transfers
Having automatic transfers is one of the best ways to stay consistent and committed to increasing your savings plan, as utilizing this feature takes a portion of your income and distributes it into an account. Check with your bank’s website and your mobile app features to see how to automate transactions. With this little effort, you will watch your savings grow with every paycheck.
Step 4: Find ways to cut back on spending to boost the savings account
Now that you have everything established, it is time to increase the balance in the savings account. Prioritize your expenses and allocate your income into the account after the necessary monthly bills have been taken care of. A pro tip is to separate your finances from your money, both physically and mentally. By putting aside money before you even get it, then the money doesn’t exist in your mind and is just there building up.
Having a savings plan opens many doors of opportunity, and many people save to reach their personal and professional goals. Remember to keep in mind the reason you are saving, and if you have questions about how to reach your financial goals, contact us today! Our financial experts offer help with the evaluation of your financial situation and lead you to make the right decision for you.