Most Americans don’t even have $1,000 in a savings account. Depending on your background, that sentence could be a very plain an evident fact, or a baffling tidbit of information you find hard to believe. But, it’s true: the majority of Americans are one missed paycheck away from financial destitution. The reasons for this are numerous, but, for your purposes, saving money is the best solution.
Where do you even start saving, though? If you’re living paycheck to paycheck, you might not feel like you have any wiggle room to save any money. However, you’d be surprised by how much you could save if you put your mind to it.
When you get paid, try to save at least a few bucks from your paycheck. Take the money aside as soon as your check arrives and don’t allow yourself to even acknowledge it exists. Put it in a savings account.
Do this until your account has either $1,000 or one month’s worth of pay for you, whichever is higher. This will help you in the event of an emergency.
A flat tire, a blown HVAC unit, or a medical emergency shouldn’t bankrupt you. Unfortunately, for many people, it does. Start saving now for one of these eventualities rather than simply praying they don’t occur.
Remember, it’s expensive to be broke. An ounce of prevention is worth a pound of cure, as they say.
If your debts are a big part of what’s putting you behind, kill your debt as quickly as you can. Focus on your highest-interest debt first. Take any extra money you’d normally save or spend on fun stuff and just hammer your debt. It’s a long, brutal, boring process, but it’ll save you a lot of money in the long run.
Letting interest pile up forever is a way to keep yourself perpetually in debt. If you’re just paying interest, and not the principal, a loan will drag out forever. This is a surefire way to stay broke forever. Eventually, you need to dig deep and knock that debt out.
Craft a budget and see how much money you have on the side after paying bills. Take some of that, as much as you can afford to part with each check, and set it to automatically deposit into a savings account. Pretend you don’t even have that money.
Over time, this “hidden stash” will start to grow rather robust. This makes it easy to then invest, or simply have a sizeable savings put back in case of emergencies.