Rainy Day Savings Strategies
While it is important to financially plan for the future, preparing for the unexpected is also necessary. It is often something unforeseen that catches us off guard and strains our financial resources.
“No one can predict the future,” says Irvin Ashford Jr., National Director of Financial Education, Comerica Bank. “It is always better to prepare for a rainy day and not need it, than to walk out without an umbrella when the storm comes.”
In some cases, you just want to save for a specific purpose or item, such as a family vacation or a new TV. Regardless of your reasoning, saving money is important and doable. The following are a few tips to help you establish some additional funds each month:
Create a budget. It’s not possible to set money aside if you don’t know exactly what you have. A budget helps you know exactly where your money is going and identify areas to save.
Look for opportunities to save. Is refinancing your home right for you? Can you carpool or take public transportation to work instead of driving? Or how about cooking dinner at home a couple more nights a week or take your lunch to work? Coupons are still a great choice – check the newspaper or see if your preferred grocery store has an app that offers savings. If you have credit or debit cards, see if you are accumulating reward points and how those points can be used.
Create a monthly savings goal. The general rule of thumb for saving is to set aside at least 10 percent of your monthly income, but only you can truly determine how much you want and need to save. Think about using free online tools like savings calculators to determine what it will take to help reach your goal and assure your emergency fund is well stocked.
Teach your kids to save. Establishing good saving habits in your kids may not be as difficult as you think. Start early by helping your child open a savings account at a bank or credit union. It will help them attain a sense of responsibility and establish good stewardship skills that will last them a lifetime. Studies show that a child with a savings account is more likely to attend college. It is never too early to start saving.
Source: Comerica Bank