SERIES: Stategies For Saving Money

One of the largest issues I see during our one-on-one financial counseling meetings is the inability to save money. Saved money is essential to long-term sustainability.  Saved money relieves stress.  Saved money allows you to take a chance.  Saved money allows life to happen (job loss, disability, pay cut, injury, etc.).

But you already knew that part.  Yet, even though we KNOW how important it is to save money, most people fail to do so.  This series will focus on PROVEN techniques that have allowed many people to save money.

If you have negative savings (no money plus overdrafted accounts and debt), the goal is to bring you to zero.  If you are at zero, the goal is to get to at least $2,500.  If you have been able to save a substantial amount of money, it is my hope that you will participate in the discussion and share your own tips that have worked well for you!

Part One  Automatic Draft From Paycheck

Establish a savings account and have the money drafted from every single paycheck.  Whether it is $25 or $250 per pay period – just SAVE!  You KNOW that the car is going to break down.  You KNOW that the school is going to send home a surprise expense.

By establishing this draft, it allows the money to be "out-of-sight."  When money is out-of-sight, it can be out-of-mind.  This allows the account to grow without being robbed.

Now, I personally had a problem with this when I did not have a monthly budget.  I would ROB my own savings account about 2.1 microseconds after I was paid.  Only after I had a plan developed that Jenn and I agreed to did my savings account begin growing in a healthy manner.

How about you?  Do you have an automatic draft for your savings account set up from your pay check?

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One Response to “SERIES: Stategies For Saving Money”

  1. Matt Kelly August 18, 2009 at 11:49 am #

    Hi Joseph,

    One of the keys to saving money, and getting out of debt, is a realistic budget. By realistic budget I mean a budget that accounts for all non-monthly expenditures – things like car repairs, insurance, clothing and Christmas.

    Without these items in the budget the emergencies just keep coming. Once you start accumulating money so that you are prepared for these expenses that occur on a less than monthly basis life gets much easier.

    Thanks for the interesting posts,

    Matt

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