We frequently talk about ways to manage your credit score, combat debt, and be financially free. One of the best ways to work towards financial freedom is having a savings account and directly contributing to it regularly. A savings account is a great way to budget your money, and give yourself a nice fund for your future and any major life events that might come your way, such as purchasing your first home, or sending your child to college. If you already have a savings account, you may want to find ways to increase your contributions. Here are a few key ways to do so:
Always evaluate your expenses before you get into forming your plan. The amount of money you save will likely be based partially on how much you’re spending per month. So you’ll want to calculate your monthly bills, and how much you spend on any other monthly expenses, such as food, gas, dry cleaning, etc. If you’re finding your spending habits are extreme and are preventing you from regularly contributing to your savings account, find ways to cut back on things that may not be that necessary or important.
Set Achievable Goals
The first step in creating any solid savings plan is setting goals that are realistic and achievable. You’ll want to base these goals on your current finances; how much money you bring in a month, versus your spending and expenses. Once you have figured that out, set goals that make sense with your finances, whether that’s a specific portion of your paycheck per week or working on a monthly basis. Additionally, you might even consider setting specific savings goals one at a time. If you have something important that you want to save for, focus on that goal without overwhelming yourself.
Pay Yourself First
Another great tool in contributing to your savings account is taking a set portion of your paycheck every time you get paid, and putting it towards your savings account. In other words, paying yourself first. Budget what needs to go to bills and necessary expenses, and use the difference to go right into your savings. You work hard for the money you make, you should look at paying yourself first just as important as paying your regular bills.