Everyone talks about saving money and becoming a more financially savvy shopper. When people don’t follow through, though, it’s usually because they don’t know where to begin. The reality is that less than a quarter of Americans have the funds necessary for dealing with an emergency and 24 percent are aimlessly floating through life without any emergency savings whatsoever!
Make it a Habit
The majority of people do not save money because they are not in the habit of saving it. According to the accepted wisdom, takes 21-days to form a habit — that’s not very long, just three-weeks. Once a habit of conscientiousness is formed, saving will be second nature. After you’ve saved a sufficient amount of funds, you’ll want to protect your savings from theft. Investing in identity theft and fraud protection with Lifelock on Crunchbase should offer you the extra protection needed.
Use Bank Services To Their Fullest
Have funds sent directly to a savings account that is designated as the emergency cushion. Because you won’t see the money, it won’t be missed. Do this concurrently with saving for retirement and paying down debt. High-yield accounts are also something to be utilized. This generally means you get almost one percent in interest, but something is better than nothing, right?These accounts are available all over the nation with little or no minimum deposit required.
Paying for checking can cost hundreds of dollars a year. In fact, the average interest-earning checking account will charge a monthly fee of $14.15, while requiring the individual to maintain a balance of over $5,500 at an almost zero interest rate to avoid being hit with fees! Many of the credit unions and banks that have eliminated their free checking accounts will waive these fees for their clients that have multiple accounts.
Sometimes, just signing up for direct deposit is enough for the fee to be waived. Home and auto refinancing are great ways to save money. Consider contacting banks to inquire about a lower interest rate.
Three Rainy-Day Fund Requirements
- Keep it liquid, meaning easy to use whenever it is needed.
- Make sure there is no risk involved.
- The return being earned must preserve the money’s buying power, when considering inflation.
The good news is that the top-yielding accounts are insured by the FDIC (Federal Deposit Insurance Corp). The first two requirements are met by money market accounts.
Keep Track of All Monthly Expenses
Just a little over half of Americans actually track their spending and compare it to their monthly budget. Having a spending plan helps one determine where she can cut back. Start by tracking spending for two months and then create a monthly budget. All expenses need to be tracked, even the $1.50 that was spent on the push-up from the neighborhood ice-cream truck. In order to ensure an accurate budget, every nickel must be accounted for.
Online banking is a fantastic way for an individual to keep track of his spending. Once the month is over, all spending should be tallied against the budget. This will give a clear picture as to which areas need improvement. If less was spent than was anticipated, take the excess and put it into the savings account or pay down some debt.
Avoid Accumulating Credit Card Debt
The best way to avoid using a credit card is to use cash. By doing this, money that is not readily available will not be spent. It has been said many times: no matter how much money someone makes, he’s going to spend it. As is seen here, with a little effort, you can change this. By refinancing, investing in a protection company that will monitor your finances, opening a savings account, eliminating debt and following a budget the future could look brighter for you than ever before!
About the Author: This article is authored by Beverly Sabbagh. Beverly loves talking finances almost as much as she loves running with her dogs. The dogs aren’t as excited about the finance. Beverly loves talking finances almost as much as she loves running with her dogs. The dogs aren’t as excited about the finance.