Quick — think about your current salary. Now, consider 10 percent of that number. Are you saving that much each year?
No? You’re not alone. Many financial experts urge clients to invest at least 10 percent of their income, but to do so may mean reorganizing your budget and reducing spending in flexible expense categories, such as clothing or entertainment.
You can also make saving easier with these quick tips:
Participate in the retirement plan at work
If your company offers a retirement plan, be sure you participate in that plan to the fullest. (And this goes double if your company offers a match!) Furthermore, if you can have the funds automatically deducted from your paycheck, do that. You will never see the money and, therefore, never be tempted to use it for something else.
Pay yourself first
One of the most important things to do when you save is to pay yourself before paying your other bills. Set up an ongoing, automatic transfer from your paycheck to a savings or other investment account, and you’ll be saving without even knowing it.
Know how much you need to save
Figure out exactly how much you should save each month using BancorpSouth’s handy Savings Calculator. By knowing your end goal and your expected rate of return, you can see just how much you need to save.
Reinvest all dividends and interest payments
Don’t cash out your gains. Let your money work for you by allowing it to compound over time.
Save or invest any gifts, bonuses or payroll increases
A great way to save or pay off debt is to use the money you receive through gifts, bonuses or payroll increases at work. Just don’t spend your extra income before you receive it!
Pay off your credit card or other debts
Pay off the lowest balance first, while making the minimum payment on the others. For example, if you have three credit cards and their balances are $1,500, $5,000 and $10,000, you should focus on making more than the minimum payment on the $1,500 card balance to pay off that balance quickly. Then, work on the others in the appropriate order. This will help you pay less in interest and fees. The key is to not put money on the card that you are trying to pay off.
Following some simple rules and reorganizing your spending habits should enable you to save more money for your future.
Harland Clarke Digital® provides managed email services for several BancorpSouth marketing programs. This content is shared with permission. Any views expressed reflect the opinion of the original author(s).