Save Today & Ease the Financial Fears of the Future

by | Jun 8, 2018 | Personal Finance 101

People get hurt. Furnaces conk out in the middle of winter. Cars die and windows break. These are the curveballs of life.

We can’t tell you not to worry, but we can recommend being prepared. And even if that preparation isn’t for the worst case scenario, the conscious effort (and act) of saving–for a vacation, a new car, a new house!–provides not only the emotional reward of setting and meeting a goal but also the financial reward of getting to spend it!

Experts advise stowing enough money to cover at least three months’ income for emergency purposes, according to Investopedia. “The funds should be highly liquid, remaining in checking or savings accounts” to “allow quick access to cash for satisfying household expenses during an emergency situation.” For non-emergency savings plans, the goalposts are yours to set. Here are a few quick tips on how to get started:

  • Start Small: You don’t need a six-figure salary to start putting money aside. Stuff those few bucks left over from lunch in an envelope. Add to it every time you eat out—and throw in the money you would have spent eating out on those occasions when you decide to eat in! If your employer uses auto-pay, ask your administrator about adding a separate checking or savings accounts, and start setting aside $30, $50, or $100 every paycheck.
  • Take Your Time: Financial security doesn’t happen overnight. The important thing is to start now. Maybe it will take two years. Maybe four. When disaster strikes, it won’t matter when you started saving. It will matter that you started.
  • Know What’s Important: A thousand dollars sitting around the house or in a bank has a tendency to make your mind wander. Five-thousand is even harder. New wheels beckon. A new couch calls. Shoes and coats and paint and carpet–the temptation to spend it can be overwhelming. If a $5,000 downpayment on a new car was the goal, congratulations! If $5,000 was half of the downpayment on a house, here’s the simplest advice to not spending it on something else: Just don’t! You can thank yourself later, twice: once for having the willpower to save, then again for having that money at the ready when you need it.
  • Make Saving a Priority: Everybody makes enough money to save. If you’re not saving, it’s because you’re living beyond your means to save–because it’s not a priority, because there’s plenty of time to save later, because what are the odds that something terrible happens? All valid points, none of which carry much solace in hindsight.
  • Make a Zero-Based Budget: Everybody ends the month with the same empty bank account. Whoever said “Your standard of living is how much you make” possessed wisdom beyond their years. Rich or poor, the dollars get spent one way or another. This is why you’d need to give every dollar a home. If you make $3,000 a month, find a place for it. Subtract the house payment and car, insurance, utilities, food, and non-essentials from your total income. You can do this digitally via the Financial GPS system (contact me for more information). When you have a place for every dollar earned, cut back from any non-essentials funds (pizza night, coffee, movies, etc.) and put it toward the extra car payment fund, savings, and your retirement account.
  • Visualize It with Actual Visuals:Visual aids are a great way set, track, and make sure you don’t forget (or inadvertently avoid) goals. Whether it’s a printed savings thermometer or a jelly bean jar where every bean represents $20 toward the Disney Land Trip, visual aids keep your goals front and center.

There is a reason nobody ever says, “I wish I’d saved less” or “I really should have started saving later in life than I did” or “I was way too smart with my money when I was young.”

As the old saying goes, “Hope for the best, plan for the worst.” And if you ever need some guidance on where to put that money or how to invest for retirement or college, we’re here for you.

Contact us today to learn more about our Wealth Builder Plans, Retirement Savings, and Debt Elimination programs.