One of the secrets to successfully saving money is paying yourself first.
“Most people say, ‘if there’s anything left over from my paycheck, I’m going to save it.’ You shouldn’t do that,” said Dr. Larry Connatser, family resource management Extension specialist at the Virginia Cooperative Extension (VCE) at Virginia State University (VSU). “Savings should come at the beginning instead of at the end. It should be the first thing they do.”
Connatser said that people shouldn’t throw caution to the wind and not pay their debts. But they should consider putting 10 percent of their earnings toward a savings plan, while still paying off what they owe.
Saving isn’t hard and doesn’t take a lot of money, but it does require discipline.
Often people don’t save because they don’t plan, Connatser said. They haven’t taken the time to sit down and develop a budget that includes saving for a rainy day. There are many personal budget templates online that can help people plan.
Now is a good time to start saving since America Saves Week is February 24 – 29, 2020. America Saves is a national call to action for everyday Americans to commit to saving successfully. According to its website, America Saves encourages individuals and families to take the America Saves pledge, a tool that empowers them to commit to saving successfully with a plan. Anyone can take the pledge by signing up on the America Saves website.
The pledge is a good way to get started, Connatser adds.
Having an emergency fund with three to six months of income is ideal, but takes time. People should commit to starting small. Setting a goal each month will help you save, he said. Even if people put aside just 10 percent of their income, that’s a start in the right direction. “Instead of spending your tax refund on a luxury item, like a big screen television, plan to save at least 10 percent.”
Gradually the money will build up, creating a cushion when unexpected emergencies arise.
It is estimated that 50 percent of Americans have little to no savings. It’s important to start saving early, and even while still in college, students should commit to saving.
Last year, about 200 VSU students took the pledge to increase savings, and Connatser said he hopes that even more will make the pledge this year.
“The younger you are when you start saving, the better off you will be.”
Parents should talk with their children about creating a budget, managing funds and saving for the future. “Once you start saving regularly, it’s become a good habit that you won’t want to break.”
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