Is Your Rainy Day Fund Growing?
By Cindy Cabbage, Assistant Vice President Loda Facility
Did you vow that this year you were going to start putting some money away for a rainy day? It’s a great idea because you can never predict when the unpredictable will happen to you. Now finding that extra money to put away – that’s the tricky part. We can’t promise you that it will be easy, but here are a few straightforward tips to get you started.
Make a Budget…and Stick to It.
Making a realistic budget is a great way to get started on your goal. Think of a budget as a plan for how you will allocate your resources. Of course, creating the budget is just the beginning. For a budget to make a difference, you have to consult it often and compare your actual expenses against what you had planned. Keeping track of your spending will show you where you can improve and motivate you to stick to your plan.
Set Realistic Short-Term Goals.
As you begin to save, it is important to set a goal for yourself. Setting a goal will increase your odds for success. But it is equally important to be sure that your goal is realistic. Setting an unattainable goal will guarantee that you fail. Instead, look realistically at your total financial picture and then set a reasonable goal which can be evaluated on a monthly (or even weekly) basis.
Check your Interest Rates on your Debt.
If you are carrying debt, especially on a credit card, you may not be aware of how much money you are spending on interest. There are opportunities to reduce your interest rate, either by talking with your current credit card company or by transferring your debt to another card. Alternatively, consider a campaign to pay off or pay down your balance to free up some extra cash to contribute to your savings.
Make Small Changes.
If you are serious about saving, you probably realize that you will need to make a few changes to your spending habits. However, often just a few small changes can allow you to meet your savings goal. For example, finding a way to cut out just $10 in spending per week can yield you an extra $500 to save over the course of a year! Give up a few coffees, forgo eating out once a week, or clip coupons to save a little at the grocery store. Just even these small adjustments can add up to a significant savings.
With these relatively painless steps, building up a savings reserve doesn’t have to be merely a goal. Get started today and make it a reality!
