Saving the Easy Way
Simply put, saving money is hard. Whether you are struggling to make ends meet or are just having difficulty planning, it’s hard to put your well-earned money aside. It’s especially difficult to save when you face uncertainty in your income or are struggling to make ends meet. Developing a simple plan and sticking to it is the best way to save. Contributing something is better than nothing, and your accounts will continue to grow as you put money aside. This method is a good place to start and is easily adapted to your comfort.
The Easy Saving Method
The easiest way to save money is to commit a small portion of each paycheck. This is a dependable way to save because you don’t need to have extra money right away. Instead, it’s a reasonable commitment for the money that you will earn. To start out you first decide on a reasonable percentage that you can contribute from each paycheck, and then commit to contributing that amount to your savings account each pay period. Starting as small as 5% of your paycheck is still a significant improvement over saving nothing at all, and it’s a reasonable contribution if you can match it each time.
If you prefer to deal with whole numbers rather than percentages, you can also put aside a set dollar amount each paycheck. There is less math involved, and you can see your savings account go up by the same amount each pay period (which is very satisfying to watch). With either of these methods of saving you can scale them to your financial ability. Everyone has different amounts that they can reasonably contribute, as well as different goals, so it’s up to you to determine what is manageable for your life.
This slow and steady way to save leads to very consistent results. Rather than trying to put aside lump sums when you have the means, regular contributions don’t feel as taxing on your finances. When you establish a saving habit there is a better chance that you will continue to save with less chance of a withdrawal. If you save infrequently and mostly contribute chunks of money at a time, it’s mentally easier to take money out for splurges or purchases. But when you are contributing a little each pay period, it feels like you are really building something and it’s easier to resist that urge to withdraw.
Keep it Growing
A great way to continue building your savings is to tie your contributions to any pay increases you earn. When you land a new job or get a raise, try increasing your contribution by half of your hourly pay raise. You will still get an increase in your paycheck, but you will also see a measurable increase in your savings. Pay raises are a great time to grow your goal, especially if you take quick action by starting right away. It’s very common when a paycheck goes up for that new money to get swallowed up by daily spending. You can deter this by promising some of your increase to your savings from the start.
Try experimenting with different contribution amounts before landing on what works best for you. Your savings goal should be achievable and shouldn’t leave you stressed about making contributions. Once you have established a savings routine that feels good to you it becomes easier to save. Keep saving at that set amount, but make sure that you check in periodically to reassess how you are feeling about your contribution. If you’re feeling confident at your current savings level, try increasing your savings amount slightly. And remember: As long as you’re saving something then you’re doing it right.
Additional Tips
Establishing your consistent contribution amount is the most crucial piece of the puzzle, but there are also many other things can help you to save your money. Most of them only need to be set up once for you to benefit from them:
-Specific Savings Accounts
It’s helpful to segregate your savings accounts based on their uses. Opening a savings account exclusively for long term savings is a good way to avoid touching your money. It’s good to have one savings account for short term, and one for the long term. A separate “emergency” account is also a great tool to use as a buffer. Learn about the importance of an emergency fund.
-Automatic Transfers
You can set up an automatic transfer each pay period so that you don’t have to remember to set the money aside. Automatic Transfers can be set up through Online Banking or our Mobile Banking App.
-Direct Deposit
Many employers will let you set up Direct Deposit, and some are even capable of splitting your paycheck into different accounts automatically. It’s worth reaching out to your employer and seeing if it’s possible. You can often indicate the dollar amount or percentage of your paycheck to go into your savings, and the rest can go into your checking. Or, you can split it up the way you like. Whatever you do, the most important thing is to save a little bit each time. It adds up.