Tuesday, January 6, 2015

Can't Seem to Save? You're Not Following These Simple Rules

#fivemin-widget-blogsmith-image-68382{display:none}.cke_show_borders #fivemin-widget-blogsmith-image-68382,#postcontentcontainer #fivemin-widget-blogsmith-image-68382{width:570px;display:block} Can't Seem to Save? You're Not Following These Simple Rules How's your bank balance? It should be healthier than this time last year. And if it isn't? Only a few explanations exist for this lack of progress: The past 12 months were filled with budget busters such as car trouble, medical co-pays and the need to replace major appliances. You were already living paycheck to paycheck, and the increased costs of food and other essentials sent you into the red. You simply didn't make it your business to save. It's vital to have an emergency fund and, ideally, additional savings for future goals (replacement vehicle, home of your own, college fund). But these accounts don't build themselves. You have to take responsibility for making them happen. Maybe you've had bad luck, as noted above. Or maybe you just haven't figured out how to save. Money Talks News founder Stacy Johnson suggests beginning by talking about goals. Simply saying "I want to save money" is a dream, not a plan. Without a specific destination in mind, you'll probably never get started. Break it down So pick a path. A specific need/want is a good start. Suppose $3,000 would put your kid through an advanced music camp this summer. Maybe you'd like to save enough for a reliable used car. Perhaps you and your spouse want to have at least three months' worth of living expenses in the bank. Do those kinds of numbers make you feel faint? Start smaller: "In the next year, I will save $1,000." Now subdivide that goal: $1,000 divided by 52 is about $19.23 a week, or about $2.74 a day. Thinking in terms of a daily three bucks is a lot more manageable than wondering how you'll come up with a grand. As Johnson notes, the easiest way to start is to figure out ways you might be wasting money. Let a budgeting app do the work for you. He likes a free service called PowerWallet. For example, it might reveal that 40 percent of your total food budget is spent on meals away from home. This kind of wake-up call will help you trim the fat, so to speak. Divert Some Funds If you've been paying extra on certain items (mortgage, student loans), stop doing that for a while. Yes, getting ahead is great, but not at the expense of having no savings to cover that car repair or balky fridge. Suppose you've been putting an extra $100 on your house payment each month. Instead, throw that hundred toward your savings goal. It won't take as long as you think to hit that sweet spot because this won't be the only way you save. Or it shouldn't be. All sorts of ways exist to carve a few dollars here and a few dollars there from your current budget; remember, we're talking fewer than three bucks per day. For some easy everyday tactics, see "15 Simple, Proven Strategies to Save On Everything You'll Ever Buy" and "7 Money-Saving Tips People Often Forget About."

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