Savings!  You know you should have it, but saving money when you are already on a tight budget is difficult at best.   The standard for an emergency fund is 6 months of savings.  So how the heck do you do it?

Treat Savings Like a Bill

If you have read the rest of this series you have purged your budget of the extra expenses that you didn’t even know you had.  Those are a tough habit to kick.  This will likely take some time.  Some people take weeks, some take months.  Give those changes time to kick in.  In the meantime, treat your savings like an expense.  Something that has to be paid every payday first.  It is now a bill.  If you treat it like a bill you will find yourself a bit more inclined to take saving seriously.

Automatic Transfers to a DIFFERENT bank!

That’s right — automate it to a bank so you have to work to get to it.  I like to use online savings for this.  Ally and Barclays both offer high yield rates, no brick and mortar locations, and no debit cards.  They also offer automated transfers from your checking to your savings.  This means that you will have the money taken out of your account before you even know you have it AND you will have to set up transfers and wait whole days to get at it.

True Emergencies ONLY

Going on a cruise is not an emergency.  You should not be dipping into your emergency fund for this.

I am a big fan of having three accounts in your online savings:

  1. your emergency fund;
  2. our non-monthly expenses fund; and
  3. your fun fund.

You should contribute to these accounts at each pay period.  Want to go on a cruise – grab from the fun fund.  Need to get an oil change on the car – go to the non-monthly fund.  Hospital bill for the emergency room when your kid decided to take a header at the playground and needed stitches – That is an an emergency. You can go to the emergency fund for that.  Got it?

Now if you are drowning in debt, saving is going to be near impossible at best.  Interested in how we can wipe out your debt so you can actually save a few bucks?  Give us a call at 732-302-9600 or fill our our online consultation form and we will call you!


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