Savings

What Should I Do If I Have No Savings?

having no savings is like white sand falling through open hands/un-splash images

Learn Where to Start If You Have No Savings.

If you have no savings you are not alone. Saving money is one of the biggest problems in our financial lives. Saving money can solve many of our financial problems. Having a saving fund can also provide you with the means to reach your financial goals. If you have no savings, it is not the worst problem to have. Here is a plan that can take you from having no savings to saving regularly and change the way you manage your money.

Start a Budget

A budget will help you discover your savings problem. You may discover that your income does not cover your basic needs. You may also have a spending problem. Search for overspend in a specific category or across the board. A budget is a great tool to identify your problem areas. It will allow you to devise strategies to make saving money easier. Once you have recorded your expenses and income, you can really begin to evaluate your spending habits.

Start an Emergency Fund

An emergency account will shield your savings, it is money set aside to cover unplanned bills and expenses. Since debt is a way of life for most of us,  it is a good idea to have about two months of expenses in your emergency account. If this feels like too much, aim for $1000 first. This will make it easier to focus on other goals because you know you have some emergencies covered. An emergency account should be your top priority before you pay down debt or purchase other items that you can live without.

Start a Debt Reduction Plan

Set up a debt reduction strategy and determine how much you are paying in debt payments each month. Determine how long it will take to pay off each debt. Then think about how quickly that could add up if you were paying yourself instead. Make sacrifices in your budget so that you can pay more money for your debt each month.  It makes sense to pay off your debt before you start aggressively building your savings account.

Find Ways to Save Daily

When you want to save money, be creative. Find ways to reduce cost on your utilities and other monthly bills. Shop for cost-effective insurance and cell phones services. Consider less expensive cable packages and select other options to save on all of your expenses. Examine your entertainment cost so that you only purchase what is most important to you. Make a goal to cut back on as many expenses as possible. Try to reduce your overall spending by $100.00 each month. Also, make sure you have an allowance and some fun money to spend on things.

Start Saving for a Purpose

Once you are out of revolving debt, and saving money, it is important to have clear goals for your savings. A home or car purchase may be in your plans. Perhaps pay for your vacations and gifts in cash. Some of your savings may be primarily for wealth building or for education expenses. It helps to know where you want the money to go to stay motivated to reach your goals.

Make Saving a Habit

My financial friends at The Balance recommends making saving money a lifelong habit. It can help relieve the stress of managing your money. It will open opportunities for you and help make navigating financial hurdles just a little bit easier. As you make saving a priority, you will begin to implement a buying strategy before you go to the store. Make your saving automatic with a monthly transfer of the amount you want to save. You cannot expect your financial situation to change until you make saving a priority.

It is important to train yourself to save money regularly. Start today!

I hope that you have enjoyed this article.

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