Saving money seems difficult. After all, when you work hard to make it, it’s tempting to spend it on things and activities that are fun and enjoyable.
As great as it would be to build that pool, wear that outfit, or head off on that vacation, it’s more important to ensure your financial future. That means not living paycheck to paycheck.
A savings account is essential in keeping yourself out of debt and avoiding financial trouble. Unexpected illnesses, a job loss, or costly vehicle or home repairs derail people with no savings and send them into financial ruin. Unfortunately, many Americans aren’t savers and have less than a few hundred dollars in savings. This means that just a couple of missed paychecks could set them up to lose their house, car, and miss other important monthly payments.
While socking money away in savings seems daunting, there are simple ways to save. Forgo that expensive daily coffee drink, chop costly cable, pack your lunch instead of eating out, and walk by that awesome new pair of boots.
These everyday expenses add up over time. But, if you want to really pack a punch and rock your savings momentum, turn to those big windfalls of cash that you receive from the government or work.
Bonuses & tax returns
Those delicious, sometimes out-of-the-blue, chunks of money that are apart from your regular salary earnings make us so happy. It’s easy to immediately calculate everything you can buy with it or trips you can take with it. STOP! Bonuses and tax returns are one of the easiest, least painful ways to build up your savings account and secure your financial stability.
Think about it:
They are not in your budget
Your salary should cover monthly expenditures. Depending on tax returns and bonuses for bills is not good money management. If they go away, how will you meet those bills? Instead of cashing your next bonus check, deposit it directly into savings. Make a habit of living beneath your means on your monthly take-home pay.
It would take eliminating lots of coffee to add up to them
Tax returns can be a few thousand dollars. It would take two years’ worth of avoiding your expensive caffeine habit to add that much to your nest egg! Saving them, and your bonuses is a great way to jumpstart your savings plan. Commit to it, and you will be able to have several months’ worth of your salary in your savings in a much shorter time.
The power of time is your friend
Spend your bonus and eventually you will tire of what you bought. Save it, and it works for you! Even a low-interest account adds money to your balance that, over time, is much more than the amount you originally saved.
Deposit the next bonus you receive or the next tax refund you qualify for, directly into your savings account. It may feel like a drag (that trip would have been fun!), but your short-term financial stability and long-range financial success are worth it.
We’re Here to Help!
If you have questions on budgeting or need assistance getting the most out of your accounts, stop by or give us a call at (888) 777-9982.
Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.