One of the basic principles of managing your personal finance is that you find a way to set some money aside for savings.
Although this can be difficult to achieve, it’s an important part of setting yourself up for long-term financial success. In addition, building a savings fund will alleviate stress when an unexpected event causes you to have to spend more money than you are accustomed to to cover the expense. Knowing that you’ve actively saved money in anticipation of a problem will soften the blow when the inevitable occurs. But how much is enough?
Start by accumulating at least $1,000 in your savings account. This will cover the most common emergencies that you’re likely to face such as auto and home repairs. Try saving a little bit from each paycheck to get to the $1,000 threshold. It’s not as important that you save the $1,000 as quickly as possible, but that you start saving (even if it’s a small amount), right away. You can even have it automatically deducted from your paycheck.
The next savings goal is to have enough money saved to cover three to six months of your normal expenses. This includes your mortgage, car payments, groceries, utility expenses, and others. This will help you in case you lose your job or you are unable to work for some reason.
If you need additional incentive to get started, you might be interested in looking at our Save to Win account. Save to Win is our free prize-linked savings program that rewards members for contributing to their own savings account. Just open a 12-month Save to Win share certificate with at least $25, and you’ll be entered to win monthly and quarterly prizes. In addition to gaining regular interest on your savings, each additional deposit of $25 gives you more chances to win! Members can earn up to 10 entries per month, so the more you save, the more chances you have to win.
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