Easy Ways to Build Up Your Savings
by: John Mussi
Building and maintaining a savings cushion
is vital for your financial health. Most financial experts recommend
having a minimum of three months' worth of living expenses set aside in
case of an emergency, but many people may find it difficult to build up
that much money in savings. If you think that you might have difficulty
in building up the savings that you need, you might want to consider
some of the following ideas.
Focus your spending
Create a budget and track your spending.
After seeing where your money goes, it's much easier to decide where you
can cut. Then live by it.
Treat saving like a bill
Consider your monthly savings amount a bill
that has to be paid. Pay your account every month or every two weeks.
Many people don't think their budget allows
room to save, but even a small amount adds up over time. Depending on
the size of your family, skipping a meal out each week could result in a
$160 per month savings deposit. Take a good look at your spending
habits, and you probably can find $150 or so each month in extras that
you could do without to build up savings.
Save your raise
The next time you get a raise at work or a
tax refund, consider directing half to savings. If you're not used to
the money, you won't miss it.
When you pay off a car or other loan,
consider making half of the payment to yourself and put it into your
emergency savings account. You will not miss the money if it is in
savings, but you will find a way to spend it if it remains in your
Turn off the TV
Don't listen to the advertisements, Ignore
sale flyers or mail-order catalogs. The latest sale tempts you to spend
Think before you charge
Unless you're in the habit of paying your
credit card bill in full each month, don't use the cards for anything
you can eat or wear.
Consider a refinance
Shop for loan quotes and see if interest
rates are lower than they were when you took out some of your major
loans. Consider refinancing your mortgage and your car loan.
Alternate your commute
If you live in an area that has good public
transportation, see if you can get around without the car. Maybe you can
get by on one car instead of two.
Do an energy check on the house. Replace
cracked storm windows and renew the weather stripping.
If you're a coffee drinker, don't stop at
the coffee shop each morning. Make your coffee at home.
Participate in a 401(k) or 403(b) plan
If your employer doesn't offer these plans,
then you could start saving in a tax-advantaged IRA or Roth IRA account.
Involve the whole family
Even the youngest child can contribute
change to the savings goal. It is easier for children to get involved if
they understand why they must give up pizza night (or at least cut down
the number of toppings!). Also, you are setting a good financial example
for your children.
Plan a treat for you, your family or both
when you reach your emergency savings goal. Make it something everyone
will look forward to, but not something very expensive, like a day at
the zoo or at the beach. The important thing is to mark the occasion and
congratulate yourself and all those who helped!
You may freely reprint this article provided
the following author's biography (including the live URL link) remains
John Mussi is
the founder of Direct Online Loans who help homeowners find the
best available loans via the
This article was
posted on January 23, 2006