Every Friday when you get your paycheck, you take out what you need for groceries, gas, rent and bills. The rest gets stuffed into your wallet and by the time the weekend is over, you’ve spent it on drinks out with the girls and shopping for things you truly don’t need. Next week, when your car unexpectedly breaks down or your best friends are booking tickets for a trip to Florida, you won’t have any savings to contribute. Get yourself on a savings plan and start putting money away for when you really need it.
Before you can devise a fool-proof savings plan, you’ll need to gather a few things:
- List of assets
- List of debt
- List of your monthly expenses
- Pay stubs
- Other types of income statements
- Define Your Goals
- Personal Savings Plan
Figure out exactly what it is that you want to save for. Does your family go on vacation every year to their condo in California? Do you want to contribute more every month to your retirement fund? You can have more than goal, but overall, your list should be relatively short.
If you don’t have one already, create a budget that includes your monthly expenses.
List all of the money that you earn from your job, as well as any investments or other sources of income.
As long as you earn more than you need to spend every month, you’ll be able to start saving.
Creating a Savings Plan
Your work isn’t done! You can’t simply stock away your excess earning and expect to reach your goals. Instead, you have to figure out how much you need to save on a regular basis. Do you want to purchase a new car in three years? Figure out how much it’s going to cost and then do the math to determine how much you’ll have to stash away each week.
Are the Numbers Not Adding Up?
Sometimes, you simply don’t have enough to reach all of your savings goals. That doesn’t mean you should scrap your whole plan, though. Consider these tips for spending less and saving more:
- Can you cut corners in your budget? Do you really need to keep out $50 every single weekend or can you do with a bit less?
- Are you trying to save too much in too short a time, or are you saving for too many things at once? Concentrating your savings in one or two areas could mean more vacations or a bulkier retirement nest egg.
- Are there additional ways you can earn money? Sometimes people take on a weekend or seasonal job just to earn the extra cash for their savings.
Some people have a hard time saving money because they don’t feel like it’s necessary. However, financial experts say that you should always pay yourself first. Having a cushion will not just ease your stress but it will improve your life. Don’t feel guilty about taking care of yourself first.