Take The Stress Out Of Saving Money

By Andy Didyk

Merry Christmas and Happy New Year!

The following is a guest post about something that I think will be on everyone’s mind as we begin a new year: saving money.  Trisha Wagner has outlined some very direct and easy-to-follow tips for making the most out of your budget in 2010.  Now if only I can get her to author a post on saving time so that I can blog more often…that’s next on my list.

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How you manage your personal finances plays a crucial role in your short and long term financial security.  Every person is different and faces unique challenges based on their own financial situation.  There are however three problematic areas that many people agree can lead to financial disaster.  They include; having too much debt, too little savings and not enough money (income) to remedy either situation.  For people struggling with limited resources, eliminating debt and building savings can add a lot of stress to an already difficult situation.  Fortunately saving money does not have to be a stressful endeavor.  Here are a few tips that can take the stress out of saving money.

• Make it automatic-  It is a proven fact that when people have to physically manage their cash, there is a tendency to spend money on unnecessary purchases.  If you have trouble getting your money into your savings account eliminate the temptation of spending that money elsewhere by having it automatically deposited into your savings account.  Determine how much money you can comfortably afford to deposit each pay and have that amount transferred from your paycheck to your savings each pay period.  Most people are surprised how easy it is to forget about that money when they don’t “see” it each pay.
• Saving to save-  Many people claim they simply do not have enough money to sacrifice even a small portion to savings.  In most cases there are areas in your life where you spend money unconsciously.  Track your spending for a minimum of one week, preferably one month to see where you are losing money on unnecessary purchases.  Consider services, memberships and subscriptions that you currently have to determine if that money could be put to better use elsewhere.  Unless you are facing a true financial hardship you can likely come up with a decent amount of cash to contribute to your savings by simply not wasting it in other areas of your life.
• Budget savings-  The benefits of having a budget have been well documented yet many consumers still do not have a household budget in place.  Every dollar should have a job and it is your responsibility to assign where your money will be spent.  By including your savings in your budget you automatically know where that money is going and will be less likely to find other uses for that cash.
• Have realistic goals-  Due to the recession individuals may find themselves having trouble balancing all of their financial obligations.  If it is unrealistic for you to contribute the recommended 10% of your earnings to savings then find a number that works for your situation.  The key is realizing that every little bit adds up and even small contributions made on a regular basis will help build savings that can be used in an emergency or toward other financial goals.

Saving money in the current economic climate may be a difficult task for individuals facing tough times, however it is necessary to ensure financial security.  By building a cushion of “extra” money you actually reduce the stress of living paycheck to paycheck.  In addition to having back up money for emergencies you also put yourself in a position to invest future savings for long term growth.  Use these tips to take the stress out of saving money and save yourself the real stress of living without savings.

Trisha Wagner is a freelance writer for DepositAccounts.com, where you can compare rates of checking accounts from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.

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