The thought of ever being able to save up for a large purchase can be overwhelming. Maybe you’re considering how much money you’ll need to set aside for a big expense, like paying for a wedding, making a down payment on a new home, or saving for a new (or newer used) car or truck. Even if you don’t have a large purchase on the horizon, you’d probably feel more secure knowing you have the emergency funds stashed for a rainy day.
Here five things you can do to make the process easier:
1. Pay yourself first
Even if you can’t afford to save enough to hit your goal in your ideal timeframe, pay yourself first. Set up an automatic transfer on payday that puts funds from your checking account into your savings account so you don’t even have to think about it. Make it even easier by setting up a direct deposit with your employer. It’s a lot harder to cancel a direct deposit than it is to cancel an online banking transfer.
2. Use the 50/20/30 rule
It sounds simple, but managing and saving your money is key to thriving financially. The 50/20/30 rule, recommends that you spend 50 percent of your take home pay on necessities like food and rent or mortgage payments, 20 percent on savings and debt reduction payments and 30 percent on lifestyle choices (clothes, haircuts, trips, dinners out, etc.). If your take home pay is $3,000 per month and you’re debt-free, that means you could be saving $600 per month. At that rate, you’d be surprised how quickly your savings can add up!
3. Start small
If 20 percent of your take home pay seems like a lot, start small — even if it’s $50 or $100 per month. Saving something is better than saving nothing at all, and you’re much more likely to keep saving if you set small, achievable goals.
4. Invest some of your money, or place it in a high-yield savings account
If you’re saving money for something you don’t expect to purchase for at least two or three years, consider contributing to a mutual fund or moving your money to a high-yield savings account in order to earn additional interest. Just remember to keep track of the rate of return as your savings grows.
5. If nothing else, start a change jar
It may sound too simple, but people have been known to save $3,000 or more just by using a 5-gallon water cooler jug to collect spare change.
Talk with a member services team member about savings strategies that you can put in to motion today and set yourself up for financial success tomorrow.