Do you know the importance of having a savings account?
If your unsure or the answer is no; let me share my story with you and hopefully it will help you to be a bit more conscious.
Have you ever heard the saying ” if you fail to plan than you plan to fail” well ladies and gentleman when it comes to having funds you should always plan. In my previous post I wrote about my move back to NYC. During that time life was still happening and I became jobless. Yep, I was out of a job, living between two states and scheduled to move by the end of the year. You’ve heard the saying of planning for a rainy day. Well, my rainy day lasted close to a year. But since I had my savings I was able to still stay afloat.
I’m able to come out on the other side because I didn’t lose faith and lived off my savings. Yes! for almost a year I was out of a job and had to live off my savings. I learned early in life that if I was to out of the blue be out of a job, I should have a minimum of 6 months worth of living expenses.
So for a little under a year, I freelanced in New York City and enjoyed my time in between. With the funds from freelancing I was able to put a bit of it into my saving and the little I had left (rarely), I treated myself.
So what are some basic steps to get started?
- Start by opening an account – Most banks have online banking and your able to sign up online. If not visit your local bank. You want to look for banks that don’t charge you for your money, that doesn’t require you to have a large minimum balance and that has at least a 2% interest rate. If you can get 5% that would be great.
- Make a List– write a list of all your expenses per month and per paycheck. Allocate for your free spending as well. Then find how much you can save. Some people include a certain amount per check to go into their saving and put it on the expense list so that they know its fund they cannot use. Figure out which one works for you.
- Blind Saving- take the funds that you realize you can save and do just that! I say use the automatic transfer tool to transfer your fund from checking to savings.
- Name your Savings account Yes, you read correctly! mine is named Don’t Touch Ever account and I don’t take any funds out of it. I believe in having multiple saving accounts but we will focus on just one at this time. This account is to start you rainy day fund.
- P.S. In my opinion I find that saving is a easier when you don’t have credit cards you have to pay off. So if you have a credit card balance, start paying that off. It makes no sense to get charged interest rates while saving- instead take that money and pay off your credit card.
- Allocate your Invisible funds- If you know you have a large size check coming in the mail. you should already know what your going to do with that money before it reaches you; i.e. Income tax, tuition reimbursement, birthday money etc…
Remember finances are part of living this life. The more we equip ourselves with the knowledge of what we have and what we’re doing with it. The more we’re #LivingACTIVELY while #ActivelyLIVING on daily adventures.