6 Simple ways to increase your savings

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Automated deposits and investments can help you reach your goals.

Many people starting out in their careers find themselves saddled with a lot of debt (perhaps from student loans, credit cards and car loans) and very little savings for future needs. But there are simple strategies to gradually make small savings or investments in large sums, even during the school years, and often with the help of automated services that make it easy.

Here are important examples:

Save for specific goals.

You should have a savings plan for major future expenses you anticipate – perhaps education costs, buying a home or car, starting a small business, or preparing for retirement (although that may be many years away). And, young adults who are just starting to be responsible for their own expenses should build an emergency fund that covers at least six months of living expenses to help get through a difficult time, such as.B. A job loss, major car repairs, or unexpected medical expenses not covered by insurance.

Commit to saving money on a regular basis.

This is important for everyone, but especially if you are financially self-sufficient.
Aim to save at least 10% of the money you earn or receive.

Setting aside a certain amount is called "paying yourself first" because you save before you are tempted to spend money.

Put your savings on autopilot.

Save quickly and easily by having your employer directly deposit a portion of your paycheck into a federally insured savings account. Your employer or financial institution may be able to set this up for you. If you don't have a steady job yet, you can still set up regular transfers to a savings account.

Take advantage of tax-advantaged retirement accounts and matching funds.

Review all of your workplace retirement options, which may involve matching contributions from your employer. Chances are your retirement savings will barely reduce your income because of what you save in income taxes, and the earlier you start in your career, the more you can benefit from compound growth.

If you've contributed the maximum at work, or if your employer doesn't have a retirement savings program, consider setting up your own IRA (Individual Retirement Account) at a credit union or investment firm and making regular transfers. Note that you can set up an automatic transfer from a checking/share draft account to a savings/investment account for retirement or any purpose you choose.
Decide where to keep the money for specific purposes.

For example:

Consider keeping emergency savings in a separate federally insured savings account instead of a checking/share account to better resist the urge to raid funds for everyday expenses. Make sure you develop a plan to replenish any withdrawals from your emergency fund.
For large purchases you plan to make years from now, consider stock certificates and U.S. Savings Bonds, which generally earn more interest than a basic savings account because you agree to keep the funds untouched for a minimum period of time.

For other long-term savings, including retirement savings, young adults may consider investing their insured deposits through low-paying, diversified mutual funds (a professionally managed mix of stocks, bonds, etc.).) or add similar investments that are not deposits and are not insured against losses by the NCUA or FDIC. For non-deposits, you assume the risk of loss for the opportunity to earn a higher return over many years.

For future college expenses, look at 529 plans, which offer an easy way to save for college expenses and can provide tax benefits.
In health care, find out if you are eligible for a health savings account (HSA), a tax-advantaged option for people enrolled in high-deductible health plans to save for medical expenses.

Consider how you can reduce your expenses and contribute more to your savings. Research lower-cost checking and release accounts for your financial services with your credit union and some competitors. And, if you are paying interest on credit cards or fees for spending more money than you have available in your Check/Share draft account, develop a plan to stop.

More specifically, look at your monthly expenses on everything from food to phones and think about how you can save.

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