This post is from our partners at GreenPath Financial wellness. If you need help managing your finances, GreenPath’s certified experts can advise you on budgeting, debt repayment options, and more.
It’s human nature. We’re all wired to meet our immediate wants, whether indulging in a tempting bowl of ice cream, spending more time than planned scrolling through social media, or treating ourselves to an impulse purchase.
Unplanned expenses or emergencies are other everyday life events. A car, a house repair, or even a weather-related emergency, can also make a dent in our budget.
Whether it’s the struggle of delaying immediate rewards for greater benefit in the future or an unexpected expense, people looking to build successful savings goals often run up against these very human challenges.
To help manage these realities, here are five tips we suggest for jump-starting your savings.
1. Build Your Budget
To set yourself up for savings success, build a simple budget. Think of it as a road map that tells you exactly where you are in terms of monthly income and expenses, what money is available to save each month, and if you’re on track.
A budget helps you monitor and track your financial progress. The most important part of your budget is updating and monitoring it regularly.
Build it in the best format for you – using a smartphone app, spreadsheet, or simple notebook. Keep it in an easy-to-find spot to track your income, spending, and saving as you go forward.
2. Set SMART Savings Goals
The SMART acronym provides a strategy for reaching savings goals that are Specific, Measurable, Achievable, Realistic, and anchored within a Time Frame.
For example, depending on your specific situation, perhaps you can tuck away $20 weekly to hit an annual savings goal of $1,000. Measure your progress each week and modify it as needed. By keeping it SMART, you will more likely achieve savings goals when bite-sized amounts are saved over a realistic timeframe.
3. Manage debt
Many people find it hard to save money when struggling with high credit card debt. The longer you carry large balances, the more your monthly payment is applied to interest, and the less you have to tuck away in a savings account. You will save the most money by starting to pay as much extra as you can on your highest-interest debt first, and then once that’s paid off, move on to your second-highest-interest debt, and so on. If you’re struggling to make a plan to repay the debt on your own, there’s help! Working with a trusted national nonprofit like GreenPath Financial Wellness is proven to help people manage debt and jump-start savings.
4. Build Your Emergency Fund
A savings plan should include building an emergency savings fund to handle unexpected expenses and setbacks that can come up suddenly. A general rule of thumb is to set aside three months’ worth of living expenses in your emergency fund. This buys you some time if something were to happen. If that isn’t realistic for your situation, start with what you can. It’s most important to get into the habit of prioritizing your savings and begin making progress. You don’t have to bite off the whole goal all at once.
Remember, at FFCCU, we offer many options to help you save, like our flexible money market accounts or higher APY certificates. If you’re looking for a short-term savings plan, certificates work by offering higher APYs than a traditional saving account just for leaving your cash at the credit union for your chosen term. Plus, you can select a term length from 3 to 60 months.
Right now, earn up to 2.75% APY* on our certificates!
5. Set It and Forget It
The most successful savers automate monthly deposits to make it as painless as possible. Decide how much you can put into savings and set yourself up with an automated transfer. Another good option is to automatically direct deposit a portion of your paycheck into savings every payday. Begin with an amount you can afford to put into savings and look at your big-picture plan to set your savings goals in the long term.
Let’s Make a Plan Together
You don’t have to jump-start your savings plan alone! At FFCCU, our helpful team can help guide you on the best savings option for you! Just call or text 216.621.4644 or visit us online.
*APY=annual percentage yield. $500 minimum balance required, visit ffcommunity.com for full terms and conditions.