If you're looking for a quick way to start up a short term saving plan, some practical tips will help you maximize the amount of money you can squirrel away. Here are some handy guidelines for the various steps of getting into your short term savings strategy.
- Free Up Money with Coupons, Bulk Buys, Etc. - One way to accommodate the beginning steps of your savings plan is to identify areas where you can "cut corners" on your regular budget with a little critical thinking and good decision making. You may see coupons that allow you to save on your monthly food purchases. Or, you can figure out ways to cut down mileage, saving gas money. All of that can help pad your initial savings account deposits.
- Figure Out How Much Money You Can Afford to Save Each Week - Getting a regular saving schedule is part of starting up a good short term plan. Look at your current budget and see how much extra you can put away for a rainy day - then follow through and set that money aside instead of letting it burn a hole in your pocket.
- Find a Good Spot to "Park Your Money" - When it comes to savings accounts, not all accounts are created equal. You'll want to find the best place to put your money in order to save more. You'll be looking for low fee or no-fee accounts where the bank is taking some of your hard earned savings just for the "service" or holding it for you. You'll also want to see how much interest you can get on your money to help grow your savings account over time. Finally, you want to ask about access to your account: are there a maximum number of transactions or withdrawals allowed? Are ATM transactions, teller visits, or other services limited? Is there a minimum balance you'll have to maintain? Having this discussion with your bank is a good way to get started with your savings plan.
- Look at Automated Savings Options - If you're not very good at voluntarily depositing your money into savings, you may want to look at some automatic routing options where part of each paycheck gets automatically put into savings. You'll also want to look at whether your savings account is "linked" to another account. For most savings plans, that's not a good situation, since your checking can draw against your savings. Set yourself up for success with a "lock box" account that's only for emergencies and eventual savings.
- Look at Growth Options for Your Savings - Some of this may be more of a long-term consideration, but when you're setting up your accounts, you'll want to look at whether you have access to a 401k or matching funds account, where your money can grow even faster. You may also want to look at tax-advantaged or tax-deferred retirement accounts or IRAs for putting money away with less up front taxation.
Think about these handy ideas when you're just getting started in building up savings and getting yourself out of a no-cash, no-assets situation.