It seems like an almost hopeless task nowadays to find ways to start a savings. With a bit of work and some creativity it can be done. Here is a review of five ways that make it possible to start a savings according to the Federal Trade Commission.
The first way is to know where your finances stand. You can find this out by listing your income and expenses. Write down a list of your income including weekly paychecks, odd-jobs, money from hobbies or other sources. Next create a list of your fixed monthly bills such as cell phones, mortgage, electricity, car payments and other bills. Last make a list of other expenses such as gifts, haircuts, clothing, and your daily java run on your way to work. Small costs will add up. These lists will show you where you could cut back on expenses or possibly pick up more money
The second step is paying yourself first each paycheck before other expenses. This can done simply by setting up an automatic deduction from your paycheck into a payroll savings plan, or an automatic transfer from a checking account into your savings. This step creates a scheduled routine where money is deposited in your savings account every paycheck.
The third step can be confusing. You can do this. It’s concerning compounding interest. According to The Federal Trade Commission, compounding interest is “the interest you earn on your initial investment plus all the interest that accumulates over time.” Bank accounts can have simple interest or Compounding interest. Simple interest is that you earn interest on your initial investment only, not on everything like compounding interest. The best choice for investments is a compounding interest account.
The fourth step is where you find “Extra” money. For instance, when you get a raise the “extra” money from each paycheck can be deposited in your savings. Or when you pay off a debt, that “extra” money from the payment you don’t have to make can go directly into your savings. These payments can be automatically transferred from your checking account to your savings to make it easier.
The fifth step is using creative ways to save money. The money you do save can be deposited into your savings account. Some creative ways to save money include going to local beauty school to have the students do your hair. They will often offer hair care such as cuts and color for free or at a reduced cost. Your local library has many books, music and DVD’s you can borrow for free. Bartering is another avenue to save. There are probably skills you have and things you can give away that other people may want or need.
With just a little bit of work and creativity you can start a savings. Even with small steps such as cutting your java run to just once a week as a treat. This simple step could save you almost fifty dollars a month. That’s fifty dollars a month that you could deposit directly into your savings account. These savings can then be used for the bills that are stressing you out the most in life. Bills like your student loan bills, mortgage bills, credit card bills, etc. These bills seem like a huge hurtle at first but with AutoPayPlus’ credit card payment plans, the stress will begin to fade away.
- Federal Trade Commission-Consumer Information. “It’s Never -Too Early-or-Too Late-to Save”
6 June 2016