5 Steps to Ready, Set, Save

1. Build Successful Habits With a Budget

The first step is to build a simple budget and keep track of where your money is going. If you know where your money is going it will be easier to make changes if you need to. Think of it as a road map that tells you exactly where you are in terms of monthly income and expenses, what money is available to put away each month, and if you’re on track.

Build it in a format that works best for you – using a smartphone app, spreadsheet or simple notebook. Keep it in an easy to find spot to track your income, spending and saving as you go forward.

2. Save Regularly

Have some of your paycheck directly deposited into your savings account or set up an automatic transfer each month from your checking to your savings account. Choose an amount that is reasonable and realistic. Depending on your specific situation, perhaps you can save $40 each week. You can measure your progress each week and adjust your goals as needed. By keeping saving automatic, you will be able to achieve savings goals over a realistic timeframe.

3. Get a Handle on Your Debt

Debt is one of the greatest barriers to saving adequately. If you have large balances, the more your monthly payment is applied to interest and the less to paying off the balance, or apply to a savings account. You will save the most money by starting to pay as much extra as you can on your highest-interest debt first. Once that card is paid off, you can move on to your second-highest interest debt.

Also, avoid using credit to pay your bills. While it may make things easier now, using credit only increases your monthly payments in the future.

When those high interest cards are eliminated, start putting the payment money toward your savings.

Working with a trusted national nonprofit like GreenPath Financial Wellness is proven to help people manage debt and jump start savings.

4. Where Else Can You Save?

Are you spending too much? There are many options for saving more, with making little sacrifice. For example, can you get a less expensive cable package or have no cable at all? Taking actions to lower your energy bill, such as turning off appliances and lights when they are not needed and purchasing energy-efficient light-bulbs, can make a difference. You can also check your insurance policies. By reviewing your plan coverage you may find you have too much and are wasting money. Also, cutting down on dining out or ordering take-out can add to your savings – a once a week $10 pizza will cost you over $500 a year!

5. Build an Emergency Fund

Emergencies happen. A separate emergency fund is a crucial part of an effective savings plan. A general rule of thumb is to set aside three months’ worth of living expenses in your emergency fund. This buys you some time, if something does happen, to make changes and get back on your feet without a huge disruption to your goals. If that isn’t realistic for your situation, start with what you can. It’s most important to get into the habit of prioritizing your savings and to begin making progress.

Your Steps to Save

When creating your savings plan and goal, remember you are not alone. GreenPath’s professional, caring financial coaches can work with you for the specific steps to save that work for your situation. If helpful, a Debt Management Plan can lower your interest rates and fees to save money and pay off debt faster.