Each New Year we make goals for our personal and financial lives, which often include something about spending less and saving more. As a Dallas bankruptcy lawyer, it is important to stress to consumers the importance of prioritizing savings account. Not just for a rainy day, but that unexpected job loss or medical illness that prevents you from making ends meet.
Making The Most Of Your Money
Many people drudge through each month check to check covering essential expenses and saving a few dollars if they are lucky. Financial experts suggest you take a look at your budgeting and saving habits every few months to make sure you are really getting the biggest bang for your buck. In fact, experts have found that there are three main habits that hold people back from maximizing their saving potential:
1. Stable savings — people set a specified amount to save and put only that amount into savings. While having an outlined goal of monthly savings is a great start, it isn’t a good long term strategy because the number is rarely revised. Instead, try boosting your savings amount by a few dollars every few months. You will slowly learn to live with less without it effecting your overall budget.
2. Unspecified savings — people tend to have a savings account without any real idea what the money is to set aside to cover. If you are saving for a purchase, it shouldn’t be included in the same account as your general emergency fund. Instead, create a separate savings account for specific purposes like a down payment on a car or house. This will prevent you from dipping into money you have allocated for a purchase.
3. Slow savings — people often save their money in a bank account alongside their checking. While this is not a bad idea, it doesn’t maximize the full growth potential of your money. Instead, take a portion of your savings and put it into a high yield account, or invest it in a mutual fund. You will see the earning interest rates are higher and yield you more return over the course of the year.