Even when paying down debt is a priority, saving is still an essential step that alleviates the pressure to borrow. Pay Yourself First is a savings strategy that avoids having to live paycheck-to-paycheck, and reduces the amount of stress that can be caused by unexpected expenses or unforeseen reductions in income. Read on for 6 strategies to grow your savings.
Begin with paying yourself first. Each time you receive income, automatically set some of it aside in savings. Having 3-6 months worth of living expenses can be of great protection in the event of personal hardship.
We recognize this can take time—and effort—but putting your own ‘financial foot’ first is an important step in securing a more stable future.
Six $avings Strategies:
- Talk to your bank about setting up automatic transfers from checking to savings each month or each paycheck. Or, talk to your employer about setting up direct deposit into checking and/or savings accounts.
- The Envelope Method is another savings technique in which monthly savings cash is divvied out into envelopes—one envelope for each savings goal.
- When you get a raise, bonus, tax refund or monetary gift, put it directly into your savings account.
- Enlist the help of family to spend less and save more. Have goals set to help keep everyone motivated. Ask for their input—they may have great suggestions on how to cut back spending or increase income. Doing so also provides children with financial knowledge and experience making financial decisions early on.
- Track spending to help detect unexpected purchases.
- Take small steps if needed. Start with a small monthly amount and increase it as you pay off debts and increase your income. Just get started! Like any habit, getting into the saving habit gets easier with time.
Have questions about saving? Want to know if your plan is on the right track? Check in with us at Lutheran Social Services Consumer Credit Counseling Service — 888-258-2227 or cccs@LssSD.org.Together we can make a difference. Make a financial gift to LSS today.