Everybody needs to be saving at least 10% or more of their income.
Unfortunately many of us fail to save even a fraction of that amount. This can
lead to serious problems because without regular savings you will have no way to
set money aside for retirement. Here are some ways that you can increase the
amount you save.
Automate You Savings
Most of us receive our salaries, government benefits and other income payments through some sort of electronic direct deposit that goes straight to our checking accounts. The problem with this arrangement is that it puts the money in a place where you can spend it quickly.
You can use direct deposit to divert of your income as soon as you earn it. That keeps you from spending those funds and ensures that they are saved. You can set a direct deposit up so that a percentage of it goes straight to your savings or retirement account. A good mix would be 5% to your savings or money market and 5% to your investment account or deferred annuity.
You should work out a budget before you take this step and make sure you will not be short on bills or extra funds in your account. A good rule of thumb is to have $1,000 more than you normally spend in your checking for emergencies or unexpected spending.
Keep Some Savings in Your Checking Account
Many people make the mistake of not keeping enough funds in their checking accounts. This forces them to dip into their savings or even their investment funds to cover normal expenses. Try keeping $1,000 or $2,000 in your checking so you will have extra cash available.
One arrangement to try and avoid is allowing your bank to automatically transfer funds from your savings to your checking if it gets low. The danger from that is that all of your savings could be depleted if your checking account becomes overdrawn or gets plundered by identity thieves. Keep the accounts separate if you really need to transfer money you can authorize one.
Put all Windfalls Straight into Your Savings
Next time you receive an unexpected windfall from something like a tax refund, gambling winnings, investment income, a bonus or the sale of some item put it into the savings. You can get your federal and state tax refunds automatically deposited into your savings. Any investment income can also be put into savings. If you're trying to sell stuff through Ebay you can set Paypal to put your earnings into your savings as well.
Never get into the habit of spending windfalls or relying on something irregular like tax refunds or investment profits. Instead make sure that money gets saved.
Get an Additional Source of Income that Goes into Your Savings
There are opportunities for additional income all around us that you can use to augment your savings. Some of these include second jobs, part-time work, consulting work, freelance work, rental properties and sales of items through outlets like Ebay.
If you have a large number of antiques or collectibles see about selling some of them. You probably will not make a lot of money but you can earn some extra income. If you spend a lot of time on a hobby - see if there is a way you can turn it into a part time business. Something to remember is that any money you spend on a part-time business can be written off on your taxes.
Automate You Savings
Most of us receive our salaries, government benefits and other income payments through some sort of electronic direct deposit that goes straight to our checking accounts. The problem with this arrangement is that it puts the money in a place where you can spend it quickly.
You can use direct deposit to divert of your income as soon as you earn it. That keeps you from spending those funds and ensures that they are saved. You can set a direct deposit up so that a percentage of it goes straight to your savings or retirement account. A good mix would be 5% to your savings or money market and 5% to your investment account or deferred annuity.
You should work out a budget before you take this step and make sure you will not be short on bills or extra funds in your account. A good rule of thumb is to have $1,000 more than you normally spend in your checking for emergencies or unexpected spending.
Keep Some Savings in Your Checking Account
Many people make the mistake of not keeping enough funds in their checking accounts. This forces them to dip into their savings or even their investment funds to cover normal expenses. Try keeping $1,000 or $2,000 in your checking so you will have extra cash available.
One arrangement to try and avoid is allowing your bank to automatically transfer funds from your savings to your checking if it gets low. The danger from that is that all of your savings could be depleted if your checking account becomes overdrawn or gets plundered by identity thieves. Keep the accounts separate if you really need to transfer money you can authorize one.
Put all Windfalls Straight into Your Savings
Next time you receive an unexpected windfall from something like a tax refund, gambling winnings, investment income, a bonus or the sale of some item put it into the savings. You can get your federal and state tax refunds automatically deposited into your savings. Any investment income can also be put into savings. If you're trying to sell stuff through Ebay you can set Paypal to put your earnings into your savings as well.
Never get into the habit of spending windfalls or relying on something irregular like tax refunds or investment profits. Instead make sure that money gets saved.
Get an Additional Source of Income that Goes into Your Savings
There are opportunities for additional income all around us that you can use to augment your savings. Some of these include second jobs, part-time work, consulting work, freelance work, rental properties and sales of items through outlets like Ebay.
If you have a large number of antiques or collectibles see about selling some of them. You probably will not make a lot of money but you can earn some extra income. If you spend a lot of time on a hobby - see if there is a way you can turn it into a part time business. Something to remember is that any money you spend on a part-time business can be written off on your taxes.
Finally, there are many opportunities for freelance
and consulting work out there. Websites like elance, http://www.freelancer.com and http://www.guru.com contain opportunities for
paying freelance work. You may not get rich but you can earn a few hundred extra
dollars a month. Those services can even deposit whatever you earn straight into
your savings account.
Steven Hart is a freelance writer and a Financial
Advisor from Cary, IL. He writes about Annuity topics like Annuity Calculator, Annuity Interest Rates, and Annuities
Good or Bad. Everybody needs to be saving at least 10% or more of their income.
Unfortunately many of us fail to save even a fraction of that amount. This can
lead to serious problems because without regular savings you will have no way to
set money aside for retirement. Here are some ways that you can increase the
amount you save.
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