Saving Money When You Are Just Starting Out
I know, I know…
Between going out with your friends, maintaining your wardrobe, binging the newest Ozarks season on Netflix, and staying up to date on the newest phone model, who in the world has time to save money?!
Well, between you, me, and the fence post, the advice that your parents, your grandma, and the wise old guru down the street have been saying for years is correct. One of the most important things you can do is save your money.
And I get it, it is very tough. So let’s break it up into manageable and actionable steps, so that way when the Samsung’s Flip hits the shelves, you will have the greenbacks to buy it, with cash!
Do it in Your Sleep
If I handed you $20, how fast would that money be spent? Be honest with yourself. I know for me, if it is in my hand, it is already spent! However, if I put that money into a savings account with really telling you, how long would it take you to spend it? A bit longer right?
That’s the first step to saving money (and really the most important). Set up part of your paycheck, deposits, whatever, to go directly into a savings account. Make it small to begin, say 10%, and adjust as needed. If that money is going to a place that is not easily accessible, then it becomes out of sight and out of mind. Which equates to more money for you at a later date!
High Roller Savings
Great! We got 10% going into a savings account and you are feeling good! Let’s take it up a notch and grow some interest on that bad boy.
You mean my savings account that I opened when I was 8 years old doesn’t have the best interest rate? (Real fast: Interest Rates are the money that the bank pays you to store your money in their bank - they use the money for loans and then pay you part of that). Back to it, NO, typical interest rates in the US are around 0.1%. At that rate, you are actually losing money to inflation!
Use the below site and find a savings account that pays you some big rates! These are all around 2%. And though you might be thinking 2% is not much, compare these two figures. $50 a month for 5 years at 0.1% interest equals $3,008.39. Now take those same numbers but do the 2% account: $50 for 5 yrs at 2% equals $3,153.47! An extra $145 in the bank for doing nothing!
So we automated are savings, we found a great savings account to store that money… all done! Yes…but no. The real big next step thing to do is budget. I won’t get into budgets in this article (did it this one), but if you can budget your money, you will be amazed on how much money you can really save!
Saving money can be easy, but the hardest part is starting. And do you know when the best time to start is? Today! That’s right. So Automate, Find High Yields, and (eventually) Budget!
You’ll be a millionaire…no, Billionaire before you know! Watch out Bezos!