Take Your Savings to the Next Level
Most people know the importance of saving. However, few people take the necessary steps to jumpstart their savings account. They may deposit a little money here and there, but at this rate, it can take years to grow a decent financial cushion.
Some people don’t think about saving their money until they’re well in their 30s. However, younger adults typically have fewer financial obligations, thus it is easier for them to save money. Maybe you’re in your late teens or early 20s. Maybe you just recently started a family. Putting your financial goals on paper can motivate you to save your money. Are you looking to purchase a home in the next few years? Do you want to start planning your child’s college education early?
If you’re ready to take your savings account to the next level, here are four financial tips to help you:
Re-evaluate Your Credit Card Situation
If you carry a lot of consumer debt, it’s hard to save money. The less you owe, the larger your savings account. For this reason, make debt repayment a priority. Pull out all your credit cards and check your interest rates. Low interest credit cards are easier to pay off because you pay less in interest each month.
If you’re currently paying a high interest rate, there are ways to lower your rate. Sometimes, all you have to do is call your credit card company and request a better rate. Understand, however, credit card companies only offer lower rates to people with an excellent payment record and a good credit score. Even if you meet these qualifications, your credit card company may deny your request. No worries. Shop around for a credit card with a lower rate and transfer your balance.
Think About Retirement
Many twenty-something adults don’t think about retirement. But the earlier you start planning for retirement, the more money you’ll have when you’re ready to leave the workforce. If you work full time, take advantage of retirement options offered by your employer. You may be eligible to contribute to a 401(k) plan or participate in an employer-sponsored pension plan. Likewise, contribute to your own individual retirement plan. Visit your local bank and talk to a banker about opening an IRA.
Set Aside a Percentage of Your Pay
How much do you put in savings each month? Granted, you can only do what you can afford. However, aim to deposit at least 10% of your earnings in savings. Therefore, if you bring home $2,000 a month, save at least $200 a month – that’s only $50 a week. Reduce how much you spend dining out or shopping and saving money becomes easier.
Plan for College
Do you have young children? If so, don’t wait until they are teenagers to start planning for their college expense. College tuition is costly, but the earlier you begin saving, the easier it is to pay this expense. Look into section 529 college saving plans. This is an educational savings plan designed to help families afford future college expenses. Nearly every state has a 529 plan. Contact a financial advisor for information on setting up your savings account.
Saving does not have to be a scary word, and even if your finances need work, there are ways to fit saving into your budget. Spend carefully, reduce expenses, and you can take your savings to the next level.