Saving isn’t just about getting rich enough to retire early. Sometimes, it’s just ensuring you have a lifeline when you need it.
Save Before You Get Paid
It’s pretty safe to say that saving money can be difficult for a lot of people. Unless you have a great salary, saving can sometimes seem impossible. This is especially true if you have trouble holding down a job.
However, if landing a stable job is an issue, you should make that a priority. I know from personal experience the difficulties of trying to find stability. As I tried to build my career, saving was far in the back of my mind. Always present, but always felt like a pipe dream.
Drowning in student loans and suffering the consequences of irresponsible spending habits from my college years, it seemed impossible to save any money. I’m happy that for several years now, I can finally put into practice the financial lessons I’ve picked up over time.
If you already have a stable job, then your next goal should be to save as much of your income as possible. There are so many unknowns in this world that you never want to be left without a monetary safety net.
How should you begin, though? With your own paychecks, of course. However you get paid, whether biweekly, monthly, or other, you should strive towards a percentage of your paycheck going into a completely separate account from the rest of your pay. For example, if your pay normally is directly deposited into a checking account, then send a percentage to a savings or another checking account.
It is incredibly helpful to remove that money beforehand from your mind and know that it’s still safely secured in one of your accounts. Most employers allow you to separate your pay into various accounts.
This is a great way to have it automatically allocated prior to you receiving your main deposit. For example, you could deposit 10% into a saving account, another 5% into a second checking account, and then allocate the remainder of your pay into your main checking account.
What percentage you should save is completely dependent on several things, from how much you get paid to how much you need for necessities and bills. Obviously, you shouldn’t let any bills slip for the sake of saving money. That would only hurt your goal in the end.
Most financial articles urge you to pay yourself first before your bills. But, how can you save $500 when you only get paid $1,000 and your bills total $700? Take a moment to review your monthly bills (or quarterly, if you have bills due every several months).
It is incredibly beneficial for you to understand your own finances. Get a better understanding of how much money you have coming in and going out.
Once you understand your own transactions, you’ll have a better idea of how much you can save per paycheck. Even if it’s just 5%, it’s still a step in the right direction. Do it. If you can’t afford 5%, save 4%. If not, do 3%. Save 1% if you can’t do anything else. Just save.
Personally, I try to shoot for 10% as a base and work up from there. Saving 50% would be amazing, but it’s not something I can afford to do for now. If you can, that’s great!
Stop Doing The Work Yourself
Once you’re in a good spot by putting aside a percentage of your pay before you receive your paycheck, then you can start looking into even more automated options. There are several apps and programs out there that can help you with this. For my own finances, I utilize Acorns (definitely dropping referral link here).
With Acorns, it automatically rounds up your transactions with a connected account. Every purchase you make is automatically rounded up to the next whole dollar. Once you have at least $5 worth of round-ups, Acorns will make a withdrawal from your account.
Unlike Digit, the money withdrawn by Acorns is tossed into an investment fund, where your money can grow exponentially based on the market.
I love the fact that Acorns is another no hassle saving method, but it can grow a lot more and a lot faster than any regular savings account, depending on how much you’re saving.
You can even supplement the round-ups with your own monthly transfer. Once the money is in your Acorns account, you can modify how aggressive of an investment strategy you’d like Acorns to implement, which can affect how fast your money grows.
Learn more about Acorns by signing up here.
Saving can be tough. I get it. I’ve been there. However, not having that financial buffer to help with emergencies is even tougher. You can save yourself a lot of headache and stress by constantly working for the future you.
There are several methods out there with regards to saving money. I cannot say these are perfect methods, but I can say they’ve worked out really well for me.
Over the course of my time with Digit, the program has been able to save over $30,000, which is amazing to me. With all these methods I’m always able to pull money from different sources if I ever need it, which is incredibly relieving.
And that’s the whole point, isn’t it?
Please note: Nothing in this article is intended to constitute investment advice. Neither the author nor the publication takes any responsibility or liability for any investments, profits or losses you may incur as a result of this information. Readers are encouraged to perform their own due diligence and research, or consult a licensed financial advisor or broker before making any and all investment decisions. This content is intended for general informational and educational purposes only. Though the author strives for accuracy, the data contained within the article cannot be relied upon. The article may contain affiliate links.
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