Everyone knows they need to put money into savings – to buy a home, pay for unexpected expenses, for retirement – but while we may have good intentions, there’s often nothing left from our paychecks to save. This is where one of the best, and easiest, ways to save money comes in – Paying Yourself First.
How do you pay yourself? The easiest way is to have your employer direct a portion of your paycheck into a savings plan. (If your employer doesn’t offer direct deposit, set aside a certain dollar amount or percentage of your wages when you first receive your paycheck and deposit it into savings yourself, before doing anything else OR set up an automatic transfer into savings.) You rarely miss money you never had, and the saving is done before you even get paid. This is especially smart if your employer offers a matching program for retirement savings – contributing at least the amount they’ll match is like finding free money.
In addition to a retirement plan, it’s smart to have money saved in an account that’s easy to access. Again, have your employer direct a portion of your earnings directly into a savings account. This is especially effective when you receive a bonus or raise – if you’re able to meet your expenses, direct your entire bonus or raise deposited to your savings account. Once your savings account reaches a certain point, you can put some of your money into an account that isn’t quite as accessible, and generally pays higher interest, such as a certificate of deposit (CD).
To discuss savings options, talk to a banker or financial advisor you trust. Putting your money to work for you is one of the best forms of self-care.
The views, information, or opinions expressed in this article are solely those of the author and do not necessarily represent the views of Citizens State Bank and its affiliates, and Citizens State Bank is not responsible for and does not verify the accuracy of any information contained in this article or items hyperlinked within. This is for informational purposes and is no way intended to provide legal advice.