Having an emergency fund is Financial Planning 101. Everyone should have between 3-6 months’ worth of living expenses set aside for the unexpected. But how do you reach that savings goal, especially if you’re starting from scratch or struggling to save?
This is where a tactic called Paying Yourself First comes in. You need to automate your savings so that your emergency savings fund is created automatically, without you taking an action. Here are some ways to do it.
One For One!
Save one dollar for every hour you work each week. 40 hours = $40 dollars saved. Set it up as an automatic transfer from your checking account to your savings account every payday. If you and your partner both work, you’ll be saving $320 per month, or almost $4,000 per year.
Round It Up!
Some credit cards and debit cards offer an “automatic rounding” perk. Every time you make a purchase with your card, it will round up the purchase to the nearest dollar and deposit the difference into a linked savings account. While we should never spend frivolously with our cards, this is a great way to contribute to your savings goal while completing day-to-day purchases.
Raises & Bonuses!
Instead of using your raise or bonus to give your lifestyle a boost, have the money deposited into your savings account instead!
By Paying Yourself First you can prioritize your savings and help ensure you have the stability to weather surprise expenses.
Wondering what else you can do to take control of your financial life? Financial Game Changer, the latest book from author and financial advisor Lynn McCarty, offers simple, practical tips to help you shrink your financial worries, gain financial confidence, and build lifelong money habits to make you feel more secure with your finances.
You’re already on your way to financial freedom. The next step is to purchase Financial Game Changer, available at any of the following digital stores: