Save Money and Create that 6-12 month
Cash Reserve
Saving money is a concept that everyone knows is important, but it's harder to apply in real life. Saving money does not necessarily mean spending less (although that's important too). There are several questions you need to ask yourself before you begin. How much will I save? Where will I put it? How can I make sure it will stay there? What you first need to determine is how much you need to save. Are you trying to save for the purchase of a car? Are you saving for your child's education? Do you have an emergency fund (of at least 6 months expenses) set aside already? For the purpose of this article, let's build an emergency fund.
The first thing you need to do is establish a time frame. I want to put away $10,000 in 1 year. The next thing you need to determine is how much and how often you save. Assuming you will save biweekly, you need to put away $416.00 every 2 weeks. Can you afford this? Have you created a budget? If not, get one done. Go to: http://www.dollartimes.com/ download-and-print/budget-worksheets.htm for your budget sheet. Trim the expenses if you need to. Now that you've completed the budget sheet, you can afford to put away $205.00 every two weeks. It's going to take you a little over 2 years to save $10,000. That's ok. You can always increase it later as your income goes up or your expenses go down. The next step is to make sure your money actually gets saved and not spent. With many banking institutions, you can have funds automatically transferred to your Savings.
You can also have the money directly debited from your paycheck to go to a different financial institution. Consider using a local bank with fewer locations. In the account opening process, do not accept an ATM card or checks. Force yourself to go into the banking center to withdraw funds. This will ensure that you do not touch your savings unless it's an emergency.
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