It often seems that saving money is almost impossible. Unexpected expenses or the temptation of some item or event can make even the best plans unsuccessful. Yet having a financial cushion is one of the most important things you can do to feel financially secure. Here are some ideas that may help:
- Contribute to your retirement plan at work — Many companies offer employees the opportunity to defer income into a 401(k) plan and will also help with a matching contribution of some level.
- Sign up for an automatic savings plan at your financial institution — If your institution transfers a set amount into a special savings account from your checking account each month, you will come to view that amount as a regular "expense" and may not even notice it is gone from your checking account. Over time, it will add up and that account will probably pay a higher interest rate than your checking account. You can also use a similar type program to have an amount automatically deducted from your paycheck and deposited into a savings account.
- Reduce high interest rate debt — If you are paying interest on credit cards or some other loan that has a high interest rate, find a way to pay it off. Higher interest rates make it harder to get ahead of the minimum monthly payment required. You might also consider finding another credit card with a lower interest rate.
- Skip a year's vacation — As much as you may look forward to a lovely trip, consider staying home, visiting relatives instead or going someplace less expensive.
- Find a cheaper apartment — A less expensive place to live, even temporarily, can help you save some money quickly.
Saving money is usually a case of self-discipline. It may be hard, but having a savings cushion can provide financial peace of mind and a source of funds if you need them.