For many, saving money can be one of the hardest things to do in life—especially in uncertain times. But it's one of the most important factors to maintaining a state of financial well-being. Now, the term "financial well-being"—what does that really mean? According to the Consumer Financial Protection Bureau, it means having equal amounts security—control over your day-to-day finances—and the financial freedom to make the choices you want in life.
Sounds like a pretty big deal, right? So why is saving money often so hard to do? Let's face it, it can feel overwhelming to put extra money aside, especially with higher inflation, rising interest rates, competing financial priorities, and market volatility. But did you know that just small amounts of savings deposits can go a very long way?
Here are the strategies and tools you need to get into the habit of saving money regularly— and it's really not as hard as it seems.
First Things First—Adopt a Savings Mindset
The first to understand is why saving money is so important—and believe it. Some reasons saving should be part of your daily routine:
Reach your goals and take advantage of opportunities
Building a savings means being able to reach your goals and take advantage of opportunities.
Prepare for short-term and long-term goals
Having money in the bank not only helps you achieve short-term goals, but also prepares you for the long-term.
Set money aside instead of using the credit card
Putting your own money aside vs. having to reach for your credit card can help you stave off accumulating high-interest debt (difficult to pay off)
Avoid daily stress and financial hardships
Lack of savings or having debt can cause daily stress and hardships that can even go beyond financial difficulties
Despite these convincing points, developing a savings habit can be a challenge. So what comes next is a "cheat sheet" to getting you on the savings bandwagon quickly and efficiently.
6 Ways to Build a Savings Habit
Now comes the nitty-gritty: The tips you need to kick off your lifetime habit of saving. These strategies work for building your emergency fund, as well as saving for short- or long-term goals beyond that. Read on for simple strategies to help build your plan.
1. Create an emergency fund to start: The idea of an emergency fund is so critical it's worth devoting a section to—because it's your very first action toward gaining financial independence. No one likes to think about unexpected medical expenses, job losses, house repairs, or vet bills. But they happen.
2. Set up an automatic savings transfers: In other words, just "set it and forget it." This is one of the easiest strategies for saving money regularly. It works because the consistency of the transfers lets you see your savings build over time. Simply set up recurring transfers through your bank so that your money is moved automatically from your checking account to your savings account. You can choose when—perhaps aligning it with your payday—and how much you want moved.
3. Let your employer help you save: If you have direct deposit through your employer, ask them to split your check so that a certain amount is deposited to your checking account and the rest to your savings account (or any comfortable variation thereof). This way you don't have to manually go in and move it, removing that decision process altogether.
4. Save more with "found money": Maybe you get some money a few times throughout the year—a tax refund, rebates, mortgage cashbacks, gifts for birthdays or special occasions. Make the decision to save that money for your emergency fund and/or for specific goals.
5. Adjust your cash flow: Take the time to lay out your income and expenses on a calendar to better visualize your what's coming in and going out and make adjustments if necessary. Creditors often allow you to change the due date of your bills—perhaps there are better alignments like when you get paid—or allow you to break up large monthly bills into smaller, more frequent ones. On the weeks you have more money available, you can work to move a little cash into savings.
6. Increase your deposits over time: Once you get a handle on your baseline savings deposits, consider "bumping" them up a bit. A good time to do this is when you get a raise, take on a side gig, or change jobs.
Choose a Path for a Better Financial Well-Being
Just like you would exercise and eat well to stay physically healthy, setting your financial life on the right track is just as important. And when you find yourself making strides—no matter how small—take a moment to recognize your success and don't be afraid to reward yourself (within reason, of course). Then move right on to your next goal.
Reach out to a City National Bank of Florida specialist or visit your nearest banking center to learn more about which products and services can help you reach your saving goals.
Please note: The content in this article comes from individual opinions and experiences. The content should not be taken as advice coming from City National Bank of Florida. City National Bank of Florida does not offer tax, legal or accounting advice.
Sources:
consumerfinance.gov
For many, saving money can be one of the hardest things to do in life—especially in uncertain times. But it's one of the most important factors to maintaining a state of financial well-being. Now, the term "financial well-being"—what does that really mean? According to the Consumer Financial Protection Bureau, it means having equal amounts security—control over your day-to-day finances—and the financial freedom to make the choices you want in life.
Sounds like a pretty big deal, right? So why is saving money often so hard to do? Let's face it, it can feel overwhelming to put extra money aside, especially with higher inflation, rising interest rates, competing financial priorities, and market volatility. But did you know that just small amounts of savings deposits can go a very long way?
Here are the strategies and tools you need to get into the habit of saving money regularly— and it's really not as hard as it seems.
First Things First—Adopt a Savings Mindset
The first to understand is why saving money is so important—and believe it. Some reasons saving should be part of your daily routine:
Reach your goals and take advantage of opportunities
Building a savings means being able to reach your goals and take advantage of opportunities.
Prepare for short-term and long-term goals
Having money in the bank not only helps you achieve short-term goals, but also prepares you for the long-term.
Set money aside instead of using the credit card
Putting your own money aside vs. having to reach for your credit card can help you stave off accumulating high-interest debt (difficult to pay off)
Avoid daily stress and financial hardships
Lack of savings or having debt can cause daily stress and hardships that can even go beyond financial difficulties
Despite these convincing points, developing a savings habit can be a challenge. So what comes next is a "cheat sheet" to getting you on the savings bandwagon quickly and efficiently.
6 Ways to Build a Savings Habit
Now comes the nitty-gritty: The tips you need to kick off your lifetime habit of saving. These strategies work for building your emergency fund, as well as saving for short- or long-term goals beyond that. Read on for simple strategies to help build your plan.
1. Create an emergency fund to start: The idea of an emergency fund is so critical it's worth devoting a section to—because it's your very first action toward gaining financial independence. No one likes to think about unexpected medical expenses, job losses, house repairs, or vet bills. But they happen.
2. Set up an automatic savings transfers: In other words, just "set it and forget it." This is one of the easiest strategies for saving money regularly. It works because the consistency of the transfers lets you see your savings build over time. Simply set up recurring transfers through your bank so that your money is moved automatically from your checking account to your savings account. You can choose when—perhaps aligning it with your payday—and how much you want moved.
3. Let your employer help you save: If you have direct deposit through your employer, ask them to split your check so that a certain amount is deposited to your checking account and the rest to your savings account (or any comfortable variation thereof). This way you don't have to manually go in and move it, removing that decision process altogether.
4. Save more with "found money": Maybe you get some money a few times throughout the year—a tax refund, rebates, mortgage cashbacks, gifts for birthdays or special occasions. Make the decision to save that money for your emergency fund and/or for specific goals.
5. Adjust your cash flow: Take the time to lay out your income and expenses on a calendar to better visualize your what's coming in and going out and make adjustments if necessary. Creditors often allow you to change the due date of your bills—perhaps there are better alignments like when you get paid—or allow you to break up large monthly bills into smaller, more frequent ones. On the weeks you have more money available, you can work to move a little cash into savings.
6. Increase your deposits over time: Once you get a handle on your baseline savings deposits, consider "bumping" them up a bit. A good time to do this is when you get a raise, take on a side gig, or change jobs.
Choose a Path for a Better Financial Well-Being
Just like you would exercise and eat well to stay physically healthy, setting your financial life on the right track is just as important. And when you find yourself making strides—no matter how small—take a moment to recognize your success and don't be afraid to reward yourself (within reason, of course). Then move right on to your next goal.
Reach out to a City National Bank of Florida specialist or visit your nearest banking center to learn more about which products and services can help you reach your saving goals.
Please note: The content in this article comes from individual opinions and experiences. The content should not be taken as advice coming from City National Bank of Florida. City National Bank of Florida does not offer tax, legal or accounting advice.
Sources:
consumerfinance.gov
