A Simple Guide to Start Saving Money

The recent news on Americans and their saving habits is concerning.

Here are headlines from three recent news articles:

• 47% of Americans would have trouble finding $400 for an emergency
• 2/3 of Americans would struggle to cover $1,000 crisis
• 1 in 3 Americans has saved $0 for retirement

This is not good news. Certainly, our current economic climate is not one that encourages saving (you know, with low interest rates and all), but that doesn’t mean it’s not important.

Money in savings provides a safety net for unexpected expenses. Saving money forces us to spend less than we make. And when the time comes for a major purchase, you’ll be glad you’ve been saving up.

But most of us are fully aware of why we should be putting money in savings.

The problem isn’t that we haven’t thought about saving money, the problem is that too many of us just aren’t doing it.

There are any number of reasons why people are not saving money. They may not think it is urgent or they may not have taken the time to set up a savings account.

But my suspicion is that most people are not setting aside money for savings because they don’t think they have enough to do so.

When everything that gets earned, gets spent, saving is impossible. At the end of the month, there is simply nothing left over to save. So the action gets pushed to the next month… and then the next… and the next.

How then can we break that cycle in our lives?

If you recognize the need to start saving money, but have not done so, this post is for you.

I’d like to offer a simple idea to get you started—in fact, it is the same idea I give when people ask me about charitable giving.

Start small and start today.

I speak often about the benefit of generosity in our lives and how it improves our well-being and life satisfaction. The conversation is often followed by a simple question, “How do I get started? I want to be charitable, I just don’t see how I can be.”

My answer is this, “Just start with $1. Literally, $1. Go find a cause that you believe in and donate $1. Don’t be embarrassed. Because of online giving, you’ll probably never stand face-to-face with anybody anyway. So just start there. Go donate $1 today and see what happens.”

Of course, my hope is not that the person will end their charitable giving with a $1 donation. Instead, my hope is that they will donate $1 and soon discover that they still have food on the table, a roof over the head, and clothes on their back. They can be generous and still survive.

Soon, I hope, they will try giving $5/month. Inevitably, again, they will discover their needs are still being met. Maybe they had more capacity for generosity than they thought. Maybe then they will try $10/month or $15/month.

They did have room for generosity all along, they just needed to discover that was true.

The same is true when it comes to saving money.

If you want to spend less than you make, start building a savings account, and begin getting ahead financially, you can do it. Even if you don’t think it is possible, I believe it is. Start small and discover it is true yourself.

Think of the stress you can begin to alleviate by taking two small steps:

1. Set Up a Savings Account. 

It is important to put your money for savings into a different account than you use for daily, weekly, and monthly bills.

Almost every bank offers savings accounts so check with your local bank first—wherever you already have an account established. However, sometimes these local banks have minimum balance requirements for savings accounts. If you are starting small ($10/month), you’ll want to check that first.

If you cannot find a local financial institution with a no minimum balance savings account, or if you prefer to conduct your finances online anyway, many of my personal finance blogger friends recommend Capital One 360. They have a convenient, no minimum balance savings account available. And it is easy to set-up—it took me less than 10 minutes to open an account with a $10 opening balance.

2. Set Up a $10/Month Automatic Withdraw. 

Just start with $10. Literally $10. Set-up a savings account today and deposit $10. Don’t be embarrassed at the amount. If you select the online option above, you won’t ever have to interact face-to face with anybody anyway.

Deposit $10 and then set up an automatic withdrawal of $10/month, as close to the day you get paid as possible.

And then see what happens. Almost certainly, you will still have food on the table, a roof over your head, and clothes on your back. Once you prove that you can survive and save at the same time, raise your monthly contribution to $15/month or $20/month. Over time, perhaps, you’ll be able to increase the amount even more. But the first goal is to prove to yourself that you can save.

Your first investment into your financial security doesn’t need to be a big one. But you do need to start somewhere.

from Becoming Minimalist http://ift.tt/1saTLMi