Saving Strategies for Better Financial Health
Savings are one of the most vital elements of an individual’s financial health. Lack of savings can result in financial hurdles in the long run, especially when you need to pay for a home repair, fund a vacation, or maintain your standard of living after retirement. A Bankrate survey found that “nearly half (49 percent) of U.S. adults have less savings (39 percent) or no savings (10 percent) compared to a year ago.”
Many people have seen a reduction in their savings due to economic uncertainty in the past two years. However, it’s important to rebuild your savings and put money aside for the future to avoid complications, high-interest debt, and loss of assets. Consider the following saving strategies for better financial health moving forward.
Identify Your Goals
The best way to save money is by identifying short- and long-term goals. This will give you a better idea of how much money you need to save. For example, to buy a house, research how much money you need to invest for a down payment and start putting money into the account. If your goal is to buy the house in five years, calculate how much you need to save each month from achieving that goal.
Alternatively, if your goal is to retire early, start boosting your retirement fund by contributing to your 401(k) plan or something similar, depending on your location, automating your savings, or
taking up a side hustle for extra income, such as renting a vacant home.
Build an Emergency Fund
The best financial security is an emergency fund to fall back on in the event of an unforeseen expense. If the pandemic has taught us anything, it is the value of an emergency savings fund. An emergency fund is a safety net to help you pay unexpected bills. Some examples of emergencies include job loss, car breakdowns, sudden home renovation requirements, or medical bills.
The general rule of thumb is to have three to six months’ expenses in your emergency fund. This may seem significant, but you don’t have to worry about collecting the money simultaneously. Create a fund and gradually add to it until you have the funds you aim to have.
Don’t Touch Savings for Unforeseen Expenses
You might be tempted to pull money from other savings accounts to fund unforeseen expenses if you don’t have an emergency fund. This includes money you saved for your children’s education, vacation funds, or retirement savings account. Taking money out from these accounts can set you back and sometimes require you to start over.
Avoid touching savings for unforeseen expenses by exploring your borrowing options. Take the time to research lenders that offer short-term loans in your area. You can take online loans from GoDay – a reputable lending platform that offers quick access to cash without filling out lengthy paperwork. GoDay’s online payday platform uses top-level encryption to keep your information safe and offer a seamless borrowing experience.
Make Lifestyle Changes
Implementing saving strategies shouldn’t be a one-and-done approach. Take the time to make a few lifestyle changes to continuously save money and reduce money-related stress in the long term. This may involve eating out a little less, limiting your shopping sprees, and avoiding subscriptions to services you don’t use. A few minor changes can save you big bucks in the long run!