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What is Saving and Why Is It Important? |
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Saving is a
short-term way to plan for a purchase. It’s one of the best ways to
prepare for emergencies, unexpected expenses or buying an item
without having to use credit. |
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| Saving: |
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short-term:
The time you start saving from when you spend it is usually 6-24
months. |
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Stops you from
spending: Don’t think of saving as putting away money that you
will never use. Saving is money you put away NOW to spend LATER.
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| Gives you
security:
Using savings vehicles (such as banks and credit unions) is less
risky than hiding the money under the mattress or in the freezer.
Banks and credit unions have government backed insurance so that you
know your money is safe. |
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| Why is saving important? |
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Saving is important
because having it (whatever the amount) brings you peace of mind and
the ability to pay for things without using credit. |
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Start
Saving Now. |
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Even
if you think you can’t afford it. |
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Even if it
is only a few dollars out of each paycheck. |
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| If you’re going
to start saving, you’ll need to have a budget. Use these seven steps
to make a successful financial plan |
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1.
Start as
early as possible |
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2.
Set goals
(short- and long-term) |
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3.
Tell your
family members |
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4. Keep track of
your spending. This is part two of your budget. It’s not
enough to write down your goals. You have to make sure
you’re following them. If you keep receipts and write down
the money you spend every day, you can compare this to
the budget you set. |
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5. Avoid debt.
If you’re already in debt, start to pay it off as soon as
you can. Stop using your credit cards and focus on catching
up. |
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6.
Take
advantage of tax savings plans.
If you company offers a 401(k) savings plan or other matched
savings account, try to put in as much money as you can.
Remember that you could be making a free dollar (or
more!) for every dollar you deposit. Why turn down free
money? |
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At some point, most
people want to do more with their money than save it.
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| That’s where
investing comes in.
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