Save automatically for your financial health

Creating an emergency fund might seem pretty basic, but it is crucial to financial stability. Making saving automatic will make it easier to build up that fund. Let’s talk about what “saving automatically” really means, how to get started, and how to be a successful saver.

Pay yourself first

This phrase sounds selfish at first. However, when you think carefully about it, it’s really about protecting yourself versus being selfish. This is because emergency savings can be the one thing that prevents you from getting into (or further into) debt. Therefore, set up an automatic deposit from your paycheck into a separate savings account every time you get paid.

Choose the amount carefully

There is no right or wrong amount to save. In fact, it will likely vary from person to person. A good end goal is to have three to six months’ worth of savings in case of job loss, injury or illness, or something else that might negatively affect your income or put you into debt. As for now, start by reviewing your income and expenses to see how much you can afford to contribute to savings per pay period. Whether it’s $10, $25, $50 or $100, something is better than nothing! 

Increase as you go

If money is tight, start small. Once you have a little more wiggle room in your budget, increase the savings amount. Another option is to reduce spending on non-necessities temporarily until you’re comfortable with what you have in savings. Think about reducing things like dining out, coffee shop beverages, streaming, or other subscription services that aren’t NEEDS. Then, what you don’t spend, set that aside into savings. 

Use cash windfalls

It might be too late this year, but if you get a tax refund, use a portion of it to boost your emergency savings. Do you get an annual or quarterly bonus? Do you have other ways to increase your income? If so, that’s a great way to tuck away a little more cash for a rainy day. While it’s tempting to immediately spend a lump sum of money you receive, successful savers will create a plan for that cash.

Make savings simple by saving automatically. Then, let that emergency fund grow and grow so you can avoid accruing debt should the unexpected arise.

If you would like support in determining how much you can realistically put into savings each month, or if you want to pay down debt faster to save more money, contact us. Our certified, nonjudgmental financial counselors can work with you to develop workable budgets or create an affordable plan to manage and eliminate your debt.

Call us at 888.577.2227 to schedule a free, confidential appointment, email us, or create your financial profile online to get started. We’re here to guide you on the path to financial wellness!

Elaina Johannessen is the program director for Debt Management Plan operations with LSS Financial Counseling.