If you’re ready to save but you don’t know where to begin, DoverPhila Federal Credit Union can help.
Step 1: Set a goal
What’s your secret (or not-so-secret) financial dream? Do you want to open your own business? Explore the Australian Outback? Buy a boat?
What are your long-term financial goals? Do you want to retire before you hit 50? Do you dream of sending your child to college? Choose your goals and assign a target dollar value to each one.
When you really start saving, first prioritize building an emergency fund that has three to six months’ of living expenses. Thinking of your bigger personal goals now will help keep you focused.
Step 2: Start tracking your expenses and income
You’re about to turn into one of those budgeting geeks.
For three months, keep a record of your expenses and all income. At the end of the three months, tally up your totals to figure out the average of each.
Step 3: Trim your expenses
If you find that your income exceeds your expenses by a fair amount, give yourself a high-five and skip to the next step.
If you spend more than you earn, or your numbers are too close for comfort, look for ways to trim your expenses, and save that extra cash.
Step 4: Create a budget
Don’t freak out — this isn’t as hard as it sounds. Just take your averages from step 2 and use them to designate a specific dollar amount for each monthly expense. Don’t forget to include savings in your budget!
Step 5: Choose your savings tools
It’s time to choose a place for your savings to call home. If you’re saving for the short term or the long haul, look to DoverPhila Federal Credit Union for savings that are customized to your needs.
Keep that emergency fund and other short-term savings in an account that allows you to make withdrawals without asking too many questions, like a checking account at DoverPhila Federal Credit Union.
Step 6: Make it automatic
Is this the first time you started saving? Yeah, we didn’t think so. Make it the time you actually carry out your plans by setting up an automatic monthly transfer from your checking account to your savings account.