Start Saving Now
Being caught up with bills every month is a great excuse for not saving. The common excuse is that the bills are too many for anything to be left over at the end of the month.It may be great to spend your cash at a great restaurant once in a while but it would be even better if you saved enough to be able to do so as often as you wish you could.
I took a long time to understand that I was the best investment I could make and I should be the first bill every month.But after a few months of just following a few basic saving ideas, I can now see the fruits of my savings goals.
1. Make Saving Your First Bill
Before you do anything with your budget write a check to your money market account. Start with 1% of your monthly income. If you earn $2000 a month, saving $20 a month should be easy for you. You might think that it is too little to start saving with but the alternative of not saving anything at all can be disastrous in the long run.Making a habit of adding 1% every month to your savings would ensure that within 12 months, you would be saving at least 12% per month of your income .This adds up quickly especially when thinking of compound interest.
2. Automatic Savings Plans
It is interesting to note that one never misses what he does not see.In fact you even forget about the amount after some time. You could do it by having it automatically taken out of your paycheck and transferred to your savings account. Some banks allow you to automatically transfer funds from your current account to your savings account. You could also consider having a mutual fund automatically withdraw funds from your checking account.
3. Defer Taxes
401k’s are the most obvious tax deferring instruments. If you have a job, taking advantage of a 401k or a 403b are the right things to do. You may also think about investing in tax exempt municipal bonds, EE Savings bonds, US Treasury securities and even municipal bonds mutual funds. However, you should do your due diligence before you invest in these types of funds.
4. Save your Change
There was a day when I really needed to get cash fast to pay a bill. I was short a few hundred dollars and needed it done in a hurry. I then remembered my money jar, and went to a local Hannaford supermarket to change the change. I was surprised to see how much I had saved. Small amounts add up quickly. So now I make a habit of saving any bill below $5 and every coin every day before I sleep. It is not only our kids who need a piggy bank.
Try these and you will be surprised to see how much you can save within one year. Do this for 10 years and you might actually pay off your house sooner than you think.
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