Start by making a budget. Take a look at what
you bring in each month. Next, write down your fixed expenses. These are things
like rent, car payments, utilities etc. Figure out how much you need each month
for groceries and other essentials. This is your bare bones budget. It’s good
to know what you need to get by each month.
Next, it’s time for a little bit of math. Start with what
you bring in each month and subtract all your core expenses. What you’re left
with is your discretional income. This will pay for entertainment, clothes, getting
your nails done etc. And from here on out, part of that discretional income
will go into a savings account.
Pick a number you’re comfortable with. Maybe that’s just
$20 per month, maybe it’s $500. Put it in your budget and treat it like any
other bill. It won’t take you long to get into the habit of setting aside that
money for savings.
To make it even more hands-off, talk to your bank about
setting up a separate savings account. Then set up an auto-deposit to have the
savings transferred to the new account as soon as your pay check comes in each
month. If you don’t see it, you’ll never miss it and your savings will run on
autopilot.
Don’t forget to audit your savings from time to time.
Take another look at your budget. Can you increase your savings a little more?
Another great way to boost that savings account is to take any extra money –
things like birthday cash, bonuses etc. – and put them straight into the
savings account. Again, you won’t even miss the money, but it will help you
build up your savings quickly.
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