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Separate each of your savings goals into an Alliant Supplemental Savings Account so you can visualize your progress.
By Katie Pins
Does the idea of coming up with a savings plan make you squirm? Do you think of the hours you’d have to spend cutting coupons? What about all the fun activities you’d have to give up? Finding ways to save money each month seems like a daunting task. However, we’ve come up with a simple list to help you get started.
Our goal is to help you make saving simple by making your savings automatic. If you spend a little time now, you could save a lot of money and time later on. So, dedicate some time one Saturday morning to implement this list. Once you finish, you could sit back, relax and experience your monthly savings.
Even if you believe you’re making the most of your employer match, now is a good time to double-check. Make sure you’re taking advantage of this added bonus to your retirement.
If you’re not contributing to your employee retirement plan, determine an amount you’re comfortable with. Any amount is a good start. This money will come straight out of your paycheck, so you won’t be tempted to spend what you should be saving for later.
If you’d like to contribute more to your retirement, a Roth IRA is especially great for young professionals. Why? You contribute to a Roth IRA after you pay taxes. Since you already paid taxes on this money, you do not need to pay them again as you withdraw. Your earnings can build tax-free. Plus, you can use your Roth for more than retirement.
Automate contributions to your Roth IRA by setting up a monthly withdrawal from your checking account. Before you know it, you’ll have a healthy nest egg for later.
All savings accounts are not created equal. You deserve a little extra help building your savings, so find one with a great annual percentage yield (APY). A high-rate savings account with no monthly service fees is a great place to keep your money. A few hundred dollars in interest a year can add up over time, or at least help offset inflation rates.
Finding the right account is simple. Just do a Google search or check out Alliant! Look for accounts that include:
Once you’re approved for a savings account, go into your online banking portal and schedule automatic transfers from your checking account to your savings account each month. You can even deposit a percentage of your paycheck directly into your savings.
Start small with 5 percent of your monthly paycheck (after taxes) if you’re unsure how much you can save. If you stick to the 50/30/20 budget, you’ll eventually want 20 percent of your paycheck to go to savings. (This percentage includes retirement.) You can work up to this amount over time.
Scheduling transfers to your savings is a great way to stick to your financial goals. When your transfers are automatic, you’ll never forget to save and you can stay on track toward reaching your goals.
Since you’re already in your online banking, now is a good time to set up alerts for your accounts.
Types of alerts include:
These alerts could help you spot fraud early, catch yourself before you overdraft or help you keep track of your progress. It’s a great way to save by preventing fees. Plus, the peace of mind is priceless!
Now that you have automated your retirement and savings, let’s take a look at some of your expenses.
Look at your checking and credit card transactions. Note any insurance, TV, phone and utility expenses and pick a couple you would like to reduce. Shop around, compare competitors and evaluate what you need. For example, sometimes cutting the cable cord is your best bet.
Here are some common recurring expenses that are easy to reduce:
Also, don’t forget to consider refinancing your loans. A lower rate or shorter timeline can really have an impact on your monthly budget or overall savings.
Negotiating your monthly expenses may take more time than the previous steps, but can be worth it. We created a six-month plan to cut expenses. So, whatever expenses you don’t cut today, you can plan to cut later this year.
Let’s take a look at your checking and credit card transactions again. Is there anything that is recurring each week, month or year? Are these expenses paid manually, or are they automated?
Most likely you can put a card on file and set a withdrawal date. By setting up automatic payments, you could avoid late fees and free up some mental space for other things!
If you’re not using a rewards card or cash back credit card, you may be missing out on some savings. There are many credit cards that offer great cash back.
A simple Google search can help you start your research. Friends and family could also be a great resource when picking a credit card. So, ask around to see which card will be most rewarding for you.
You’ll want to pick a card that rewards you for your daily purchases. Then, use your card on your regular purchases and you’ll earn on nearly all your spending. The key is to avoid spending extra on the new card. The game plan is still to save.
In addition to a card that rewards you, keep an eye out for automatic coupon programs. There are many out there that reward you for shopping online without cutting coupons. A little research into the right program could add up to big savings.
If you still have extra money at the end of the month, consider automating your short-term and long-term savings goals. You could start small by investing a little each month in a low-cost mutual fund. Or, you could also open a certificate to lock in a high rate. There are a lot of low maintenance investment options out there.
When saving for a particular short-term goal, you can open a supplemental savings account and name the account. It’s helpful to separate your accounts depending on your goal. This way you can track your progress and avoid dipping into the fund for other expenses.
By putting in the work now to make your savings automatic, you’re more likely to reach your savings goals. You’ll also be able to have the peace of mind that your personal finances are in order. You’ve created a plan, and you’re implementing it effortlessly month to month.
It doesn’t hurt to do an audit once in a while. As your financial goals change and you start budgeting for big expenses, sit down again and revisit this list. Happy saving!
Katie Pins is a marketer fascinated with finance. Whether the topic is about the psychology of money, investment strategies or simply how to spend better, Katie enjoys diving in and sharing all the details with family, friends and Money Mentor readers. Money management needs to be simplified and Katie hopes she accomplishes that for our readers. The saying goes, "Knowledge is Power", and she hopes you feel empowered after reading Money Mentor.
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