Financial planners suggest we have at least three month’s living expenses saved for emergencies, but how many of us actually have that? The only way to save a large sum is to put away small amounts on a regular basis. Following is a four- step plan to help you do just that:
1. Change your thinking. Saving is easier when you’re saving for the right reason. Think about how relieved you will feel to have money saved should the unexpected happen.
2. Know how much you need. Take a look at your budget and determine what your monthly essential living expenses are.
3. Budget for saving. Determine how much you can put into savings with each paycheck. Divide your ultimate goal by this number to see how long it will take you to arrive at this sum.
4. Set short-term goals. Break your ultimate goal down into quarterly short-term goals. That way, you can see that your small savings are really adding up!