If you're a recent graduate or you've rented your first apartment, saving is probably the last thing on your mind. How can you get inspired to save?
So, you finally made it on your own: you got a job, rented an apartment, bought a car (or mastered the public transportation system), paid the bills… and you’re now realizing that after all of this there’s not much money left. Saving is probably not on your mind. How can you get inspired to save??
To get inspired, think about what you want from today and from the future. There are 3 different “buckets” your inspiration might come from, so to get started on the savings path, think about a couple things you might want to save for out of each one.
3 Buckets for Savin’spiration:
Bucket #1: Saving for the future. Starting to save for this before you have dependent kids or parents can really help build up your account. You can start savings for things like a down payment on a house, retirement, or your children’s education. Even though these things are far in the future, putting away a small portion of your paycheck for them means less to stress about later.
Consider this: saving $150 a month starting when you’re 25 will add up to $45,000 by the time you reach age 50. If you started saving just 10 years later at age 35, you’d have to save $100 more every month (that’s $1,200 more a year) just to reach the same goal.
Bucket #2: Saving for the unexpected. At some point in the next decade, something unexpected will happen. It’s important to have money set aside to cover things like car trouble, medical bills, a broken phone or computer, or a job loss.
Bucket #3: Saving for the fun stuff. You’ll also want to have some money set aside for the fun things in life too. Maybe you’ll be able to attend your friend’s destination wedding or be able to buy a new car that actually has air conditioning.
Now I’m sure you’re thinking...
“That’s inspiring and all, but there’s no way I’ll actually be able to save that much.”
It can seem daunting. Saving for the future, for emergencies, and for the fun stuff while still meeting all your needs for today is a lot. But it doesn’t have to be completely intimidating if you can follow a few easy steps:
1. Live like you’re in college.
What I mean by this is that your college self penny-pinched on everything. When the bread was gone, you were fine with eating the peanut butter straight out of the jar and calling it lunch. When all the plates went missing, Frisbees were an acceptable substitute.
Now you don’t need to go to those extremes (and probably shouldn’t—gross), but you get the idea. Just because you have a steady paycheck now doesn’t mean you shouldn’t still be a little thrifty. Opt for the generic brands every once in a while or stick to coffee from home instead of from a coffee shop. Put the money you save from living life more frugally into your savings. It’ll add up.
2. Protect your paycheck
It’s time to consider health, disability, and life insurance. All three are important to have, especially now that you’re out in the real world. Your employer might even offer one, two, or all three types of insurance.
Think of it as part of your regular monthly savings. It might seem a little backwards… spending extra money every month to save money?? But preparing for the unexpected, like an injury that leaves you unable to work for a period of time, could save you A LOT of money if it happens. Depending on what your employer offers, you may need to fill in the gaps to make sure you have enough coverage to keep you afloat during difficult times.
3. Hit your milestones
Set some goals for yourself, like reaching $1,000, then 3 months’ income saved, then 6 months. Having a goal in mind will keep you from using your savings unnecessarily. Then when you do hit your marks, you can reward yourself a little. Go ahead, buy the large chocolate ice cream in a waffle cone, you deserve it!
Written by Katie Switzer
This blog post is from the Author's perspective and doesn't speak for brightpeak financial. Contact brightpeak if you want to know more about brightpeak products, and keep in mind that they are not available in all states and there are some limitations (some exclusions and restrictions may apply).