Creating a savings account that can not only cover a few months of expenses, but be there in case of an
unexpected emergency is a must. Many money -gurus all tote the necessity of creating a savings account. For me, creating a savings and not spending it created what I like to call the “saving sorrows”.
Seeing all of that money sitting there, waiting to be spent, on oh new shoes maybe, a vacation, a new car, all so tempting. For a long time, I let my mindset dictate my spending. I am fortunate enough that I am able to automatically transfer $500 a month into my savings from my paycheck. Yet for years, I never had more than $1,000 in my savings account at a time. Which means that although I didn’t need it for bills, I was still finding ways to spend that money that could have been growing and providing my family with some security to help on our quest to end debt.
Now, I can say that we are only a month or so away of our goal of $5,000 in savings, or about 3 months of our expenses. Phew. What a relief. Then, anything above that will be used to pay of debt (aka double + payments on our college loans). We cannot wait for that to happen but we must be prepared for any unexpected expenses, which is why I put my spending habits in my back pocket and started to get serious about saving.
Some startling statistics (from Dave Ramsey):
- 62% of Americans have less than $1,000 in their savings
- 83% of Americans do not have enough to cover an emergency
- 26% of Americans have NO savings at all
Now how much you save is truly up to you. Dave Ramsey suggests $1,000 but for us, that did not feel like enough. We wanted enough to cover a few months of expenses with confidence. Also, although it’s important for us to pay off our debt ASAP, having enough to live comfortably and provide for ourselves (and our furbabies) is also very important to us.
Saving does not have to be a daunting experience. There are apps out there like digit that use algorythms to track your spending habits, that guarantee to not overdraft your account and you can adjust the level of savings based on your needs (save more or save less all with a quick text!). It is all automated and you don’t have to do a darn thing, just what I like to hear. I am trying this service out this month in addition to the money automatically taken out of my account from work. So far, I have saved $6.50 this month. As you can see, over time this could really add up, I am excited about this service and look forward to reporting back to you all after my first full month.
Simple Steps to Turn your Saving Sorrows into Savings Success
- Do what you can and be okay with that. When I first started having money put into a savings account, I started with $50. Yes, that’s all I could manage at the time. So whatever you can swing, do it. Don’t beat yourself up over not being able to put as much as you want. Anything is better than nothing.
- Put your savings somewhere SAFE. As I shared before, it was too easy for me to transfer money from my savings to checking, hello shopping bliss. So, I have since disconnected my savings from my online banking, which means the only way I can transfer is a trip to the bank.
- Set a realistic goal. As I suggested earlier, at least two months of necessitates should be covered. Add up your expenses and cut out what you could live without for a few months if needed.
- Automation is necessary. Connect your savings account to your pay check or use Digit (as I mentioned above). Make that happen without any effort. Put the money away and forget about it. It’s there ONLY if you need it.
Do you have a savings account started? Share your saving tips below!