If you’re struggling to build your emergency savings, try this tip. Pay yourself first. It may seem like an obvious thing to do but most people focus on monthly expenses and often pay more than they need to on credit card bills which leaves them unable to put money aside for savings towards a new car, a down payment for home, or to cover emergencies. Paying yourself first is not a frivolous thing to do, it’s quite the opposite. If you overpay on credit card bills and don’t put money towards savings, then you leave yourself short to handle the unexpected expenses like a trip to Urgent Care. What do you do in that situation? You charge it!
There is no hard and fast rule as to how much you should pay yourself from every check. Even $25 to $50 per paycheck is a great start. To take the guesswork out of saving money each month consider having your bank automatically transfer a set amount from your checking account to your savings on a set date or dates. If your employer has a payroll savings plan, take advantage of it. The HR manager at your job can put a specified amount into your savings account for you on each pay period. Start with a small amount at first then increase it when your confidence builds.
For help with financial, retirement, or tax planning, contact Alloy Wealth at 800-689-3935 to speak with one of our team members.