How Do I Boost My Savings?
Everyone talks about saving money. But for many, that’s easier said than done. Here’s a 3-step plan for making sure you’re saving as much as you can.
1. Have a Goal.
Experts say you should have three to six months of expenses saved in an emergency fund, which should remain untouched until you really need it. So if you have a major expense or purchase coming up—a new car or house, college education, home improvement—you need to set a separate savings goal to meet that expense.
2. Set Up a Budget.
Divide a piece of paper in half. On one half, write down your monthly income after taxes. On the other side, write down your expenses, sorted into three categories: “fixed expenses,” including mortgage, car payment, and other recurring fixed costs; “variable expenses, like food and clothing; and “extras.” Now subtract your total expenses from your income to see how much is left over for savings. Are you satisfied with that amount? If not, cut expenses where you can, starting with the extras, then the variable expenses, and finally the fixed expenses.
3. Make Saving Automatic.
Once you’ve decided how much you’re going to put away each month, do yourself a favor and automate it. Direct deposit a portion of your paycheck into a savings or money market account. Or, set up a recurring automatic transfer from your checking to savings, either through Online Banking or by transfer authorization (see a customer service representative). What you don’t see, you won’t be tempted to spend!