There’s nothing like a recession to motivate you to lead a more financially responsible life. Because everyone’s financial situation is different, it’s best to consult a financial adviser to see exactly how much of each paycheck you need to be saving, but in the meantime, I’ve compiled a few saving tips that have been helpful for me and my husband in recent years.
#1: Build an emergency fund. The most important reason for saving money is to protect you from unexpected setbacks, including losing your job, a broken-down car, medical costs or home maintenance issues. Our financial adviser suggested we save six months’ living expenses in our emergency fund. To be sure you have access to this money when you need it, keep it in a savings or high-interest money market account. To find federally insured banks that pay the highest interest rates, visit www.BankRate.com.
#2: Create a retirement savings plan. Once you’ve established your emergency fund, your next step is to pay yourself and put a percentage of each paycheck in a retirement account. It’s best to speak with your financial adviser to see exactly how much you can afford to sock away to your retirement account,- you may even be able to save more than you think.
#3: Always be conscious of other ways to save. You’ve created an emergency fund and set up a retirement account, but you never know when you may need a new car, a down payment for a new house or the vacation of your dreams. Coming up with more savings when you’re already contributing to a 401k may sound impossible, but if it’s something you really want, there are ways to save even more cash.
Create a weekly budget and stick to it, no matter what. Save every receipt for every item you spend, from big-ticket items like a new television all the way down to a new toothbrush-it’s the only way you’re truly going to realize exactly how much you’re spending and where you can cut back. Other tips include cutting coupons, taking 24 hours to think over a purchase of more than $100 (do you really need it?) and paying for everything in cash, not credit cards.
