Want a Nest Egg of Your Very Own?

Want a nest egg of your very own? Maybe a nest-egg in the literal sense of the term is reaching a bit too high for starters. But how about putting away a little money for a rainy day? Sure, it isn’t all that easy to do. Most people are just making it living from paycheck to paycheck. We start out with the best of intentions but, at the end of the day, there simply is no money left over to save.

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Today is the day all of that changes. If you don’t make up your mind to do it now, you won’t do it at all. So this is “Decision Day.” Decide that it is time to set some cash away.

Having a rainy-day stash – otherwise known as an “emergency fund” – accomplishes two important things:

Know that “the unexpected” is NOT Christmas or birthdays. You have a calendar. You expect them, don’t you? OK. So this pile of money is NOT for that. What is it for then? Sudden repairs, for instance.  The hot water heater goes or you have a flat tire. Those are the types of unplanned for things that an emergency fund is meant to cover.

How To Start Saving

1. Start by making a personal budget. Take a look at what you bring in each month.

2. 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 how much money you need to get by each month.

3. Now it’s time for a little bit of math. Start with what you bring in each month and subtract all those fixed expenses. What you are left with is your discretionary income. This will pay for entertainment, clothes, getting your nails done etc. And from here on out, part of that discretionary income will go into a savings account.

4. Pick a number that you are comfortable with. Maybe that is 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, go to your bank and set up a separate savings account. Ask your employer to have that amount automatically deposited in the savings from your paycheck. If you don’t see it, you’ll never miss it and your savings will build all on its own.

Be sure to audit your savings from time to time. Take another look at your budget, as well. Can you increase your savings? Another great way to boost that savings account is to take any extra money – i.e. birthday cash, tax return, bonuses etc. – and put it straight into the savings account. Again, you won’t even miss the money, but it will help you to build up your savings quickly.

Make sure your savings is in an interest bearing account. Since you won’t be touching this money unless it’s a dire emergency, you should be able to earn at least a little interest. Talk to your banker about your best options and start saving today.

Enjoy!