Savings 101

Savings are essential to financial independence – they allow you to plan for the future and to deal gracefully with unforeseen events when they do occur. If you don’t have a savings account where you can store funds and easily withdraw them when necessary, then make one! 

To start off, start putting aside a designated portion of your paycheck each month before doing anything else with it. You should decide on this amount based on analysis of your own needs and monthly expenses. It should be significant enough that you are able to save a good portion of money over a reasonable period of time, but not so significant that you are unable to take care of necessities and monthly expenses. You can also take advantage of features like automatic transfers, which do this saving for you each month (or apps like Digit). If you take the automatic route, make sure you stay on top of your deposits and withdrawals so that you don’t overdraw!

Aim for the goal of saving and keeping about four to seven months of living expenses in your savings account so that you are prepared for the future and able to deal with unpredictable circumstances or financial troubles. Hang on to your receipts to take inventory of where our money is going each month and look for ways that you can cut down! For instance, instead of getting that six-dollar coffee every morning, find a cheaper alternative that you can make at home so that you can save without losing that caffeine fix!

No matter their income level, anyone can have a successful savings account and solidify their financial independence with steady cost-cutting methods and strict self-discipline when it comes to saving.