Ultimate Savings Guide: All Your Questions Answered

We all know that we need to save money but how? Where? When? How? All those answers and more are in this fantastic savings guide. 

All Your Savings Questions Answered in this Ultimate Savings Guide

 

Why should I read this Savings Guide?

So you probably could tell that I am really into savings. How much should you save? As much as you can! The more you can put in savings now, the better. Remember; assume that you won’t have the opportunity to save more later on, so do as much as you can now. Life is extremely unpredictable.

Please don’t fall into the trap of thinking that tomorrow will be better. Tomorrow may be better, but when it comes to preparation, it’s best to fall on the adage: hope for the best and prepare for the worst. I encourage you to prepare for the worst when it comes to saving money. So it would be best if you started saving money as soon as you can. This Savings Guide is for you to use TODAY!

When do I need to start saving money?

When do I need to start saving money?

As early and as young as possible! In other words, today. No matter how old you are- you should start saving as soon as you possibly can.

Save! Save! Save!

When do you need to start? As early and as young as possible. That’s right- today. You need to start saving money today. No matter how old you are- teenager, college student, just returned from seminary- you need to start saving money now. In fact, if you have children, you should encourage them to start saving now– especially if they get any cash as gifts from Bar or Bat Mitzvahs or other events. 

If you are single or living at home and you have minimal expenses- use this time to save. It may be depressing or hard to live at your parents’ house, but trust me! The amount you save can really help you later on. As you move on in life, get married, have kids, etc., the expenses go up and up. Having no student loans, and therefore no student loan payments, and having money put away for a house and retirement can really help you in the long run. Try as hard as you can to live on less and save more.

Obviously, this doesn’t mean you shouldn’t enjoy your life! That is why we have a splurge account and a clothes account. You can spend money on yourself, you should live and travel and enjoy, but you should also save as much as you can. Challenge yourself to save as much as 50% (or more!) of your paycheck. This money will grow and grow and help you tremendously!

How do I start saving money?

How do I start saving money?

Start by setting a goal of $1,000. Having a goal is the best way to get you motivated to start saving money.

The first way to get motivated is to save $1,000 dollars. Having the first $1,000 saved will change your financial life. (Join the $1,000 Savings Challenge here!) $1,000 is not necessarily enough cash savings to have, but it is the first step to having a promising and secure financial future. Set Savings Goals to help you keep on track. Join a money savings challenge to keep you motivated. 

You should put money in a separate savings account so that you are not tempted to spend it. Having money set aside, that is harder to access (you can’t just swipe your debit card) will help keep that money out of your reach. You need to have a few accounts, such as an Emergency Fund and Retirement Accounts. These should all be in the appropriate, separate places. For more information on Individual Retirement Accounts and where exactly you should keep your savings check out the Savings Ladder. Do not keep your savings money in a checking account!

How to Start Saving Money Step-By-Step Guide:

Make a monthly budget.

Set up a Savings Account.

Transfer money every paycheck into your savings account.

Put Extra Money (from gifts or your Tax Refund) in your high-interest savings account.

How to Use Money-Saving Tips?

Money-savings tips will not save you thousands of dollars that you can put in your nest egg. These money hacks and tips and being frugal and thrifty will help you do two things: stay in your budget and find a little extra money. These small savings can add up, however, to make a large difference in your money spending habits. If you have a good and clear budget, then by using all these tips, you can make sure to use all the extra money you saved to make meaningful contributions to your savings goals. This is a great way to create savings habits that will last you a long time. Spending less money in your day-to-day life will give you more freedom and options later on in life and give you a more simple and minimalistic life.

There are so many ways to find money to save: you can cut your subscriptions, look to save money on utility bills such as your energy bill. By spending less money on these things, you can have more money for whatever you want! You will have more money for security. More money gives you financial freedom.  These small savings can snowball into large amounts.

Why do I need to have money in the bank?

Why do I need to have money in the bank?

Life is unpredictable. Things can get crazy. The secure job you thought you have can be gone in a blink. That's why you need savings.

The no-risk investment or side hustle can be gone as well. Some people think that they can just cut expenses really drastically if they need to. However, this is neither practical nor easily doable. Moving is not really a quick fix, and besides, moving expenses add up super quickly. Additionally, you may find yourself in a situation where cutting expenses is less than ideal. (Global pandemic, anyone?). While cutting expenses is an excellent idea when you can, you need to have a really good savings account as well. Using a credit card can be great if you need to, but credit card debt can quickly spiral out of control if you are not careful. Putting money away in the bank means that you have money when you need it. 

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How much money should I save?

How much money should I save?

At least 6 months of living expenses.

I personally suggest having at least six months of living expenses in a high-yield savings account.

Calculate all your regular expenses, multiply by six, and then round to the nearest thousand. That’s your new savings goal. You should be regularly adding money to this account every time you can. While you are working, while you are paying off debt, you are saving up for other things. Put money into your savings account. Keep in mind that as life changes, your savings account number may go up or down. I would highly suggest not ever taking money out of this account to adjust for a lower lifestyle change. Still, you should add money as life adds more and more expenses (think kids, old age, lifestyle inflation).

Remember: assume that the worst is ahead of you and plan accordingly. You cannot assume that the hard days are behind you and that your income will just go up or that your expenses will become more manageable. They might, but there is a substantial chance that something unexpected or bad may come up. You may be the outlier whose income just goes down. Or you may have challenges ahead of you that you can never have foreseen. Having a good savings account will buffer you against the hardships of life.

Why is saving money important?

Some people don’t fully understand how important money is to a good life. Perhaps they are young and have never experienced living without money, maybe they have lived a life of privilege, but this I can tell you: while money is not the goal of life, it’s really freaking hard to reach your goals without money.

I am not trying to extol the virtues of money or encourage you to think that everything is about money or that money is the end game. It’s not. There are plenty of very wealthy people who are extremely unhappy and lead terrible lives. Money is not the be-all and end-all. BUT money can help you. Money is the means to an end. Having money can put you in a position where you can live your fullest life, where you can help others, where you can actually make a difference.

Why do I need financial security?

Having a bit of financial security is like having a safety net. It allows you to live your life with less fear. It enables you to reach out and help someone else because you know there is something there to catch you. This is why it is so incredibly important to have a secure financial life.

You don’t need to (and absolutely should not) obsess about money or make money the sole focus of your life. What you should do, however, is take the money that you have and work towards building security for you and your family; once you have that security take that privilege and use it to help others and make the world a better place.

This brings us back to the first point: when you can, you must save money. Save as much as you can. Make your money work for you. Allow yourself to live without something to create a better future. Making positive money choices to allow yourself to live a good life is the best use for money.

Now that I have you convinced, it’s time to start saving money!

Related: How to Save Money Fast!

Related: How to Save Money on Living Expenses

 

 

Hi! I am a millennial mom with a passion for personal finance. I have always been “into” personal finance but got inspired to start my blog after a period of extended unemployment. That experience really changed the way I viewed my relationship with money and the importance of accessible personal finance education.

3 thoughts on “Ultimate Savings Guide: All Your Questions Answered”

  1. Nice read!
    Something I’ve noticed with people that aren’t active savers or carry debt, is that they tend to spend more money. People I’ve talked to about this have mentioned that “they’re already screwed, so what difference does it make?”

    Once they finally see some light though, and begin to save, or make more, and see a progression in their financial situation their attitude quickly changes to “wow, this is awesome, now that I have money in the bank I don’t want to spend it!”

    The key is to catch the latter behavior before the prior sets in. From a young age, it’s important to set financial goals and plans. Don’t become a victim of your financial situation! Start saving today!

    Reply

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