Start growing your personal wealth today with these simple tips that promote healthy spending and savings habits.
Saving money sounds simple. Take a dollar and put it away for a rainy day. However, in order to create a healthy savings plan that will support you throughout your life, it takes some discipline and a long-term commitment. These simple tips will help you prepare for sudden expenses by creating a savings account that will grow every time you collect a paycheck.
DO Automate a Weekly Savings Plan
Even if you just got your first job, head out to your local bank and set up a savings and a checking account. Deposit your paycheck into the checking account and schedule an automated deposit into the savings account on a weekly or monthly basis. That way you will never forget to do it. When you get your first raise, increase the amount you put in the savings account. Saving 5% of your income is a great goal.
DON’T Put It in a Piggy Bank
Even if your regular savings account offers a very low interest rate, it is still better than zero. Over time the bank is giving you free money for leaving it in the savings account. When you slip that five dollar bill into a piggy bank, it will always remain a five dollar bill. They’re giving you cash! Take advantage of the opportunity.
DO Take Advantage of Your Company Benefits
Many companies offer retirement plans such as a 401K. They often offer matching funds for every dollar you contribute to the account. Once again, this is free money. Just for planning for your future, you are earning tips that will accumulate over the years into a substantial addition to the amount in the account. In order to receive the maximum amount, make sure you are putting as much away as you are able.
DON’T Spend Out of the Savings Account
If you are always going into the savings account to pay for your weekly groceries or electric bill, you aren’t actually saving anything. That account is there for an emergency or for a major purchase that you plan to make in a year or two. Do whatever it takes to remove the temptation of spending your savings on a night at the movies or a new pair of shoes. Leave the bank card in your sock drawer. Remove the app from your phone. Each time you do empty that account, it is no longer a savings account, but a spending account and you have defeated its purpose.
DO Pay Off Your Credit Card Every Month
While it is a good idea to have one or two credit cards in your wallet, it is never a good idea to maintain a balance. The only time that a credit card is a good spending tool is if you pay the entire balance off every month. Otherwise, instead of putting an extra dollar into your savings account, you have to spend it covering the interest rate the credit card company is charging you. If you can’t pay off your credit cards within six months, consider taking out a secured personal loan to lower the interest rate and cancel your cards until you have better control over your finances.
DON’T Finance Standard Living Expenses
It seems that we start off life in debt, as many college students are funding their education with massive loans. However, when those loans are also paying for your food, rent, and utilities, you are paying the bank extra money to cover the standard expenses of living. If you are covering monthly bills by taking out more loans, then it is time to review your standard of living and reduce extra expenses for entertainment, your cell phone, and possibly clothing in order to get your budget back under control.
When you do need some extra help covering sudden expenses or maybe a home improvement project, check out the personal loans offered at 1(800) Car-Title®. You will find a monthly payment plan that will help to handle unexpected emergencies as you begin to build that savings account.