For most of my life, I thought “savings” were only for people who made a lot of money. While it’s true that some people who are struggling to make ends meet don’t have the luxury of saving, many of us can afford to put at least a little money away each month for emergencies and for future plans.
Most savings plans start with budgeting. Estimating your income and expenses over a period of time allows you to determine how much you have leftover after you pay your bills to put towards savings. As a general rule, you should aim to save at least 20% of your income each month. This amount may change based on how much debt you have or other variables.
A medical emergency, car repair, or other unexpected event has the potential to cause a lot of financial distress… especially if you are already having money trouble. That’s why your first savings goal should be a $1,000 emergency fund.
From cutting out lattes to using cash, there are a ton of strategies out there for saving more. Pick a few, and see how they work for you. Then try a few more. Before you know it, you’ll be saving more than you thought possible.