So many families are living at the edge of their budget; if there were an emergency, such as the car breaking down or losing a job, these families would be in financial ruin. So what can we do to be responsible and prevent this from happening? Saving now for tomorrow.
Set up a Budget
The first thing you’ll want to do is set a budget. To do so, first list all essential items that will be the same every month: rent or mortgage, utilities, car insurance, gas, etc. As you list the items, see if there is anything that could be reduced or eliminated. For example, if you’re paying for premium cable TV, consider either reducing to basic cable or getting rid of cable altogether. With so many shows available online, do you really need cable anyway?
Once you’ve determined the staples of your budget, decide on the items that aren’t the same such as groceries and entertainment. For these items, the best way to handle them is to decide on an amount and get that amount in cash. Label an envelope with the budget item and whenever you spend money in that category, pay with the cash in the envelope. When the money is gone, there’s no more money that month.
If you don’t already have a savings account, then set one up at your bank that is connected to your checking account. Set up an automatic transfer online. Using the budget you made, determine how much you can afford to move over every month. It’s easier to do if it’s automatic, and pretty soon, you’ll have a sizeable amount in your account.