First Steps for Saving

Step 1: Set a goal

What’s your secret, or not-so-secret, money goal? Do you want to open your own business? Are you wanting to travel more? Maybe you want to buy a new 4-wheeled toy.

Also, think about your long-term goals. Do you want to make your friends jealous and retire before you hit 50? Do you dream of sending your child to college?

Choose your goals and assign a target dollar value to each one. When you really start saving, first things first, build an emergency fund that has three to six months’ of living expenses. Thinking of your bigger personal goals will help keep you focused.

Step 2: Track your spending & income

You’re about to turn into one of those budgeting geeks. For three months, keep a record of your expenses and all income. At the end of the three months, add up your totals to figure out the average of each.

Step 3: Trim your expenses

If you find that your income is more than your expenses by a lot, give yourself a high-five and skip to the next step. But, if you spend more than you earn, or your numbers are too close for comfort, look for ways to trim your expenses, and save that extra cash where you can (every penny counts).

Step 4: Create a budget

The dreaded B-word. Don’t freak out — this isn’t as hard as it sounds. Just take your averages from step 2 and use them to designate a specific dollar amount for each monthly expense. Don’t forget to include savings in your budget!

Step 5: Choose your savings tools

It’s time to choose a place for your savings to call home. Keep that emergency fund and other short-term savings in an account that allows you to make withdrawals without asking too many questions, like a checking or specific savings account.

For long-term savings, look for an option that offers an attractive earnings rate, like a share certificate at Guadalupe Credit Union.

Step 6: Make it automatic

Is this the first time you decided to really start saving? Yeah, we didn’t think so. Make this the time you actually carry out your plans by setting up an automatic monthly transfer from your checking account to your savings account. Set it, and forget it!

Now, go make that vacation happen!