Would something like an unexpected car repair put you in a precarious financial situation? According to a recent survey conducted by CareerBuilder, more than 25% of American workers don’t set aside any monthly savings. Seventy-eight percent say they live paycheck to paycheck at least some of the time. Without any savings or extra cash on payday, any unexpected expense can force you to turn to a credit card that charges high interest, or worse, a payday loan store to bail you out. That can be the start of a vicious cycle that’s hard to break out of.
If money is tight, it may be hard to imagine how saving is possible. That’s why it’s important to understand where your money is spent each month and then develop actionable savings goals. Taking a look at your spending habits may reveal that with a few small changes, starting a savings account is possible.
Your first savings goal may be to put away the equivalent of 3 to 6 months of standard expenses. Sometimes just starting is the hardest part, but saving even $5 or $10 a paycheck can put you on the road to financial security. Pay yourself first each paycheck by automatically depositing part of your check directly into a savings account. If you don’t see it, you won’t miss it and your savings will start to grow.
For more information on how to save on a tight budget, visit americasaves.org