Living check to check
Here are some tips to help you start saving.
December 27, 2016 - Author: LaShawn Brown, Michigan State University Extension
According to Alex Thomas Sadler, host of Common Cents, a recent poll revealed 45 percent of Americans are living paycheck to paycheck. Do you fall into that category? It may not be as hard as you think to start a savings account. Tracking your income and expenses is a good place to start. It’s important to know where your money is going, so you can find areas that can be changed. Take the Are you an Overspender? quiz to see if you are spending unnecessarily. This quiz will help you acknowledge the problem, so you can begin changing your behavior. The following steps can help you start saving:
- Track your expenses. You can use a small notebook to track expenses or use the Plug Spending Leaks Worksheet to help you see areas where you can reduce expenses.
- Create your spending plan. Once you’ve tracked your expenses, you will have an accurate account of your income and expenses. Use the Managing your Money Worksheet to help you get started with your spending plan.
- Open a savings account. If you do not have a savings account, open one now. Your local bank or credit union will often have free accounts if you have a checking account. Another alternative may be to use an online institution so your money is not easily accessible in those impulsive moments. Make sure your bank or credit union is Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) insured so that your money is protected.
- Set-up automatic deposits. You may forget to transfer funds on payday, so why not set up automatic transfers so that you pay yourself first. Setting up automatic transfers help you build your savings quickly.
Saving is possible, even when living check-to-check. Start small and increase when possible. Saving as little as $5 per check can help you build your savings. If you receive a tax refund, think about adding some of it to your savings account or use a portion to start your savings account. Happy saving!
Be sure to check out Michigan State University Extension and MIMoneyHealth.org for more great tips on saving. Don’t forget to take our Financial Health Survey and get your score to learn about more ways to improve your financial health.