When Saving Is A Struggle To You . . .
There is no secret or disagreement in the fact that saving is a crucial part on creating a healthy financial environment. Either you are family making $30 or $300 thousand a year, you simply cannot go on spending every cent you make . . . eventually, you'll go into deep debt facing major financial distress.
Savings are vital for more than one purpose, but all those reasons summarize to one: to keep us out of debt by being able to pay in cash for certain things (especially emergency situations), rather than having to charge a credit card. However, in spite of the importance of having a savings account, many people simple don't know how to save . . . others don't even think about it.
Does this subject hit home to you? Do you know the importance of having a savings account, but don't seem able to accomplish it? Do you know someone in this situation?
If saving seems to be an impossible task for you to accomplish, these are useful ideas that will help you get started on your path of becoming an avid saver!
First Things First — Change your perspective about a savings account. Instead of thinking of it as money taken away from you, give it a 'Purpose Label': money to pay off my credit card, or money for my vacation to Aruba, or money to buy my new TV, or money for Christmas gifts, or money for emergencies, etc. When you do that, it is easier to put money away, because you have a specific goal you really want to accomplish!
Create a Budget -- This is the most important step! By creating a budget, you will be able to organize your finances, and see how much money you can really spend, and how much money you can actually save, without sacrificing or compromising on essential expenses. Click here to read more about the importance of a budget, and to download your Free excel template of a Monthly Budget.
Open a Separate Savings Account — Open a separate savings account that is not linked to your checking account, and at a separate bank or institution that is NOT too close to you in distance. This will deter you from having easy access to the money.
Prevent yourself from having access to the ATM Card — Having an ATM card with you is almost like having that money in your pocket, as ATMs are extremely accessible and available pretty much everywhere. When you receive your ATM card, ask someone you completely trust to keep it for you. Not having an ATM card PLUS having your bank office quite far from you, will increase the chances of keeping your money exactly where it is. (You could decline receiving the ATM card, but it is not advisable in the event you have an emergency and you really need the money on a day when banks are closed).
Set a Direct Deposit — Once you create your budget and determine the monthly amount of money you can save, go immediately to your payroll manager office, and set a Direct Deposit . . . remember: out of sight, out of mind; if you don't have the money in your hands, you can't spend it!
(Remember that the budget template provided above is a monthly budget. Make sure you take the total amount assigned to savings and divided by the number of paychecks you get in the month, to spread de direct deposit in even amounts).
Participate in your 401K Retirement Plan — If you are not already doing it, participate on your company's 401K Retirement Plan. You decide how much money you contribute, AND almost very employer will match the amount of your contribution up to certain amount from your paycheck. Who doesn't like free money? Even though this is money you have no access to until retirement age (with just few exceptions), it is a no-fail way to force yourself to save money that otherwise would be spent on unimportant things.
Increase Your Income Tax Deduction — If nothing else works, set your income tax deduction for an amount higher than you know you need. (You can set your income tax deduction for a specific flat amount per paycheck). As crazy as this might sound, this is an approach that works for many people when they know they wouldn't save any other way. It is true that you won't get the benefit of earning some interest as you would with a savings account or a 401K, but at least it is money that you'll be putting away, rather than spending it on trivial things, and you would have access to it in just a year when you file your income tax return.
There's nothing to lose and much to gain in the practice of saving on a regular basis, and I sure hope these simple tips help and inspire you to get stated on your path of becoming an avid saver!
Your Turn Now!
Do you have a useful tip to help other to get started on the practice of saving? Do you have a question or comment on any of this points? I'd love to hear from you on the comments below!
Article link: http://www.joyfulsavings.com/blog/when-saving-is-difficult-for-you
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