Saving Methods to use for the New Year

It's very important that we save for emergencies, as we never know when they will occur. Depending on where you are financially these saving strategies can help you start saving effectively and began the new year strong.

1. $1 a day method: with this method you can count how many days are in the month and save that amount from your paycheck each month. For example, January has 31 days in the month so you will save $31 that month, February has 28 days in a month, you would save $28 that month and so forth. This may not seem like much to some but can be very helpful for someone who has a challenging time saving or for an extra savings on the side.

2. $10 per paycheck method: Setting up an automatic withdrawal of $10 from your checking account to your savings account each pay period. Some banks allow you to set up auto transfer, so whenever your direct deposit enters you checking account the bank will automatically transfer $10 to your savings account.

3. $5% auto payment method: You may have your employer direct deposit 5% of your paycheck into your savings account. I like this method because each pay period you never have to remember to add money to your savings account as the funds are already there. I find this method most convenient since the work is already being done for me. (However, 5% each paycheck may not be ideal for you, so you would want to stick to the method that works best for you.)

4. $6k in 6-months method:

   Saving $231 a week for 26 weeks can get you to $6k in 6 months. If your main income does not allow you to save $231 a week, you can possibly achieve this goal by picking up a side hustle. Also, if you receive tax returns, large settlements, or unexpected income, these can be used to help you achieve this savings goal.

5. $12K in 12-months method:

   A well-known rule of thumb is to have 3 to 6 months' worth of income in savings. So, if your monthly income is $3k you should have a minimum of $9k in savings for emergencies. If you were to lose your job, having 3 to 6 months of income saved helps ensure you are able to cover expenses for the next 3 to 6 months. Achieving this savings goal can help give you a solid emergency fund depending on your income. Using the same strategies for the 6 months saving method and saving $231 a week for 52 weeks can help you obtain this goal.

Have something to spend:

While saving is important, having money to spend is also important. Having spending money can help avoid dipping into your savings. So, while your saving be sure to keep some spending money on the side.

While saving can be challenging, the results are so rewarding. Save now and your financial portfolio will thank you later!

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