04-24-2017 07:10 AM
Content provided courtesy of USAA.
$1,000. A grand. One large.
No matter how you say it, it sounds good. Think about the sense of well-being that would come from knowing you had 10 crisp $100 bills tucked away in your wallet. Everyone should have that feeling.
Consider these six steps to help you get started:
- Open a savings account. My oldest daughter once saved $800. On her way to deposit it in the bank, she took a detour by the mall and left her purse sitting on a clothes rack. That envelope with her $800? Gone in a flash. The lesson? Your hard-earned money is safer in a bank account than in your hands.
- Automate. Does money burn a hole in your pocket? If it's not there, you can't easily spend it. The Defense Department's myPay site and nearly all banks allow automatic transfers that can shift some of each paycheck from your checking to your savings account. Five percent is a good starting point, but more is obviously better. Just $84 a paycheck will get you to your $1,000 goal in six months if you are paid twice a month.
- Cut back. You should be able to find areas where you can reduce spending. It may be on restaurants, coffee, sporting events or gaming. There's no need to go cold turkey — a few small changes can add up quickly.
- Cut out. On the other hand, some spending needs to go. Eliminate casino trips, a tobacco habit or other types of spending so you can free up some cash.
- Don't give up. Stashing money in a change jar may not be the ideal way of saving $1,000, but if that's all you can manage right now, then it's an improvement. It may take time, but the key is to stay on track and avoid spending what you've worked hard to save.
- Work both ends of your budget. Budgeting is all about a plan to manage both expenses and income. Cutting back may get you to your goal, but increasing income through a part-time job or home-based business could do wonders in your quest to stash some cash.
Once you reach your goal, celebrate — in a responsible way. But don't stop with $1,000. Setting aside a grand is just a small step on the road to financial security.