Simple Rules for Saving
Saving does not necessarily mean sacrifice. It does need some self-discipline and motivation which may come from the thought of a comfortable future, especially in retirement when there is no longer a monthly pay check coming in. There are some simple rules to follow though certainly the recession which was a shock to everyone was something that dented many families' plans. That has now receded and the American economy is in a much healthier position. There should be no excuses not to be in a better position than a year ago with the aim that a year on things will be better again.
You need to ask yourself whether you are in a good position, better than a year ago. There can be reasons why you are not:
- An emergency that you didn't expect relating to your home and its maintenance, a medical bill or auto problem.
- You seem to be spending all you are earning and see no way to cut back on your expenditure or increase your income.
- You simply don't see any reason to save.
If you don't see any reason to save you need to ask yourself what you would do if you suddenly faced an emergency. What if you suddenly fell ill and faced a sizeable medical bill and you were unable to work for a period? You have to make a conscious decision to save if you want to be in a position to meet such an emergency.
The recession hasn't helped of course but it's already been said that things are better now. You need to sit down and look at the figures; what you are earning and what you are spending on a regular basis. If you don't have a surplus each month you may not see a way to save but perhaps you can look more closely behind the figures?
You should set yourself some targets, whether they relate to an emergency fund, retirement or perhaps the money needed to fund your children's education then work out what is achievable. If you have a figure and timescale in mind then you need to break that figure down into monthly segments, and even weekly or daily if that produces a small enough figure to make it look realistic. $1000 a year is less than $3 a day of course so $10,000 is under $30.
There are some obvious things you can look at to save yourself money. Are you certain that there is not a better utility company, insurance company or telephone network provider in the market that would save you money? You must compare like for like and there is help at hand in some of the comparative website that do much of the early research for you. Likewise if you have any balances on credit cards you are paying a high rate of interest at the end of each month. You will save money by paying off those balances by borrow at realisticloans.com without credit check which will incur a much lower rate of interest. It makes sense to do that as long as you have the self-discipline not to build up balances again; that means using your card for convenience as long as you can pay off the statement balance in full at the end of the period.
You might be eating out a lot and whether you see the need to economize on your lifestyle will depend upon your circumstances. It may be no sacrifice at all to change a few things. If you regularly dine out with friends, would you have as much fun cooking for them at home? You can take a sandwich to work and make your own coffee. Incidentally that may be much healthier that buying from coffee shops anyway.
An alternative strategy
You may have been following an alternative strategy of paying off your mortgage quicker than you needed to, perhaps also your student loan. These are things that are low interest and in the case of a mortgage of a period of up to 30 years. You may like to think that you are being financially responsible and indeed it is difficult to argue that you are not being sensible. That is unless you can see a way to divert that extra money each month directly into savings which may benefit you even more. If you need someone more used to dealing with figures and investments then seek advice.
It is worth paying a little more attention to your checking account. If there is money in there the day before your pay check arrives, it might be worth transfer that balance into savings. Indeed on the day the pay check arrives it may also be worth transferring money out into savings immediately so that you are committed to save and don't regard your available funds for the month as any more than is then left. Remember that illustration of $1000 in a year is under $3 a day. If you put your loose change in a jar each night you may even be able to raise the $1000 that way. Even if you don't do it every day you will still be amassing a decent amount of money. You do not have to make major sacrifices in order to save. You simply need to realize the sense in doing it and visualize the future benefits that having funds in place will bring you.