Saving is hard. You can always find a reason to spend that extra money whether it’s those new pair of shoes you must have, the sports gear that will help you win or the toy your kid wanted so badly.
The bottom line is that money is gone and you have to start all over again to find that extra cash to stash away for a rainy day.
You’re not alone. Most Americans don’t have enough money in an emergency savings account. In 2019, close to 50% didn’t have enough in their emergency savings or no savings at all. In 2020, the pandemic didn’t help those numbers with over 60% lacking the necessary funds.
Your savings should be separate from your regular checking and should be enough to cover three to six months’ worth of expenses. So if you make $2,000 a month, you should be saving $6,000 to $12,000 total.
How do you save that much? Here are some helpful tips to save without thinking about saving.
Open an Emergency Fund Savings Account
According to the website Bankrate “less than 4 in 10 people have $1,000 in savings to prepare for an unexpected expense.” This can happen with unanticipated bills like car repairs and home renovations or unexpected events like unemployment, sickness or disability. An emergency fund account can help with these incidents. You can start by establishing a monetary goal and a time period to reach that goal, and then set up automatic transfers each pay period. An emergency fund can assist during a tough financial time without racking up credit card debt, taking out a loan or asking money from your family.
Round up your spare change
Another set it and forget approach to savings is to sign up for your financial institution’s save the change program. At Bellwether, the Saving Makes Cents program allows you to save the change into a savings account of your choice. Each purchase is rounded up to the nearest dollar every time you use your debit card. Here’s where every penny really does add up.
Ignore Your Next Pay Increase
Whether it’s the year-end bonus or annual pay raise, pretend that you didn’t receive it. Instead, transfer that money into your savings. This only works well if your current living situation is comfortable and you really don’t need that cash for everyday expenses.
Deposit the Cash Back Rewards
If you have a credit card that offers cash back on purchases, you can redeem those funds and deposit them directly into your emergency savings account. Depending on your credit card spend, this could add up to a couple of hundred dollars each year.
Start a Savings Challenge
There's nothing like a good old-fashioned challenge to motivate the competitive juices in some of us. Get together a group of friends or post the challenge on social media asking people to join. It can be as simple as saying you will save $50 a month for the next six months. This will help keep you accountable and save in a fun way.
If you add these easy saving habits to your everyday life, you will be better prepared when an unexpected event happens. So choose what works for you and start saving today.