Did you know that 57 percent of Americans have less than $1,000 in their savings? It’s a startling statistic, and I'm sure most of us would like to set more money aside for that inevitable rainy day. In fact, experts recommend you have enough in your savings to cover three-to-six months of expenses.
This week marks the beginning of America Saves week, a nationwide effort to encourage all Americans to save. It’s a great opportunity to start a savings habit or renew your commitment to saving.
Why should I save?
Saving is an important part of financial stability. It can help you deal with emergencies and, over time, achieve your financial goals.
How do I start?
First, make the decision to save and set a savings goal. You are more likely to stay motivated if you are saving for something important to you. If your budget is tight, start by saving $500 for emergencies. You can save $500 in one year if you set aside just $20 per paycheck (assuming you get paid twice a month). Also, if you’re receiving a refund on your taxes this year, consider saving a portion of it to get a head start on your savings goal.
If you’re not sure how much you can afford to save, you’ll need to create a budget. Start by tracking your spending, which will give you a clearer picture of how you are using your money now. It may also help you identify some places where you can cut your spending. That money can be put into savings.
Should I Save if I Have Debt?
The answer is generally, yes. Saving even a small amount while you are paying back debt can help you deal with unexpected expenses and emergencies and avoid taking on more debt as a result.
How can I make saving easier?
If you have regular wages, consider directly depositing your paycheck and depositing a portion into your saving account. You will quickly adjust to those dollars being deducted from your paycheck, and before you know it, you’ll have a sizeable savings account.
For more tips on saving and money management, visit MySmartMoney.