Ask Aunt B

Dear Aunt B,

I need to have some savings. Whatever I do, I seem to spend every penny I have. Do you have a (easy) way to start saving a little money?

Broke

Dear Broke,

Such a very good question. We all need some savings.

I think the start of this process might be the most difficult. This, like most things we want in life, just takes some discipline.There are a few interesting ideas that I have heard over the years.

One idea is to have a large jar and to put any and all change every day that you have in your pocket. This is increasingly difficult since quite a few of us don’t carry cash anymore.

Check with your employer and see if they have a program that can deduct your savings from your payroll so you don’t even notice it is gone.

Most people know much more about this topic than I do so I will defer to their advice. Dave Ramsey is followed successfully by many and has very sound advice.

Years ago I read the book The Millionaire Mind by T Harv Eker and found the principles very interesting. His program has you breaking down your bills and expenses and putting certain percentages in jars labeled for specific purposes.

I think the most important thing is to do something that can happen automatically so you don’t have extra temptation to just spend the money.

In researching this question for you, I found statistics that said 56% of Ameri cans have $5000.00 or less in savings. Further it stated that most Americans have less than $1000.00 in savings. Most recommendations that I found stated that ideally you should shoot for having a minimum of 6 months of your expenses in savings. Wow, there is a wide discrepancy here.

It would be easy to get discouraged if you are just beginning and looking at these statistics. Try to just breathe and begin. You can’t get there overnight but you will be surprised how quickly savings can mount if you get on track and stay consistent and of course don’t dip into the savings.

I realize that banks aren’t paying much interest on your money these days but I still suggest you open a savings account and place the money in said account. If nothing else this will make the money a little more difficult to reach. What other ways might you protect this money from your urge to just spend it?

If you live paycheck to paycheck then you need to get creative. How might you spend less? Do you eat meals outside your home? Do you buy fancy drinks? Do you have a spending problem? Just a little clue, if you are spending your entire income you probably have a spending problem. Start by writing down every penny you spend so you can get an idea where your money goes. Once you have a clear picture of your spending, enlist someone’s help in completing a budget. Include your savings in your budget.

The quicker you get this started the happier and more secure you will feel. It is really worth the effort. Good luck.

Love, Aunt B

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