Will you take the pledge to save? One of the best ways to prepare for the future is to make sure you have a safety net in times of trouble. Having enough money to cover three to six months of living in expenses in savings is essential to having a financial stability. In the event of unforeseen circumstances like sickness or job loss, the savings can help a family navigate through the tough times without taking on an excessive amount of debt during the challenging times.
Some may say, saving is easy, I already have twelve months of living expenses in my savings. That is wonderful, you are well on your way to financial freedom. Many of you reading this, may say to yourself, “I am barely getting by, I really cannot afford to save!” You really cannot afford not to save.
For those who are saying the latter, saving is not as difficult if it may seem. In order to save, it will take a little discipline, but it can be done. You just need to make a plan to save money.
1. First, take a look at your spending habits. Go over your bank statement, online bank account and see what your spending patterns are. For those who are tech savvy, there are some apps available to assist you with this. Mint by Intuit is a user friendly tool that can be used to track spending habits. For those of you who are not comfortable using technology or a computer, it is easy to track with pencil and paper.
2. Next, set a budget. As you look over your spending patterns, you will notice that you have items that are necessary to live. Also, you will see that you spend money on items that you want. The goal is to set a budget where you have income, or left over money at the end of the period.
3. After you have set you budget, put aside some of the left over money at the end of the period into a savings account, preferably interest bearing.
4. Revisit your budget and revise as necessary. You must be disciplined in sticking to your budget and not dipping into your savings, as you build to save three to six months of your living expenses. You may set aside, $50 dollars a month. After consistently saving for twelve months, you will have $600 in your savings account.
Are you will into take the pledge? America Saves allows you to sign up to pledge to create a savings, click here for more information. They will send you reminders and other helpful tips to help you take this major leap towards financial freedom.