It makes financial sense to set up a savings system
- Pay off credit cards. Pay down high interest debt such as credit cards.
- Build up an emergency fund. Put aside at least six months' expenses that can be tapped into for unexpected expenses such as medical bills, car expenses, etc. By doing this, it will help you not slip back into debt with unplanned expenses.
- Pay yourself first. Use automatic payroll deduction or automatic transfers from your checking account to put money into a separate savings account.
- Start out small and then increase. Begin by tucking away 2 to 3 percent of your paycheck. Then try to increase your savings rate to 10 percent.
- Employer savings plan. If the company offers a matching savings plan (example 401K), take advantage of it to match your contributions.
- Save your raises. Whenever you get a raise, increase the amount you are saving. You don't have to save it all, but the more you save the better.
- Live within your means. If you don't need it - don't buy it.
Change A Habit And Save
Get your "saving jar" ready because you can save by giving up just one habit! One small change from you can add to your savings or get you on the track to saving. All you have to do is think about what you are willing to sacrifice and take the plunge. Habits to give up might include:
- Bring you own coffee instead of buying those brews that are costly.
- Make and take your lunch to work.
- Instead of eating out with friends or family, have a potluck at your house in a more relaxed atmosphere.
- Pack your snacks or sodas instead of purchasing them from the vending machines.
- Purchase with cash, or your debit card, and not your credit card. You'll be surprised at how much can be saved by not whipping out the plastic and paying interest on your card. Plus, it is easier to see cash on hand dwindle down.
Be true to yourself and place what you actually saved in the jar and watch the money add up!
Stick with your plan. Just because you might have a setback doesn't mean you stop saving.