How to Start Saving Without Delay

How to Start Saving Without Delay

If left up to us, we would put most things off indefinitely.  It is easy to say we will do it tomorrow but later realize that tomorrow was a number of years ago.  For that reason, I encourage family members and friends with a desire to save money to start saving immediately with $5.  I find most people do not see $5 as a barrier and many would actually state that it is too small a number.  However, I still encourage them to start with $5 anyway and remind them that we are simply starting a process.

I already covered how I started saving, and this is something I try to share with family members and friends to encourage them to do better at saving. I usually mention online banks because the money is generally not as easily accessible as it would be at the local bank. Additionally, these online banks usually offer significantly better interest rates overall.

Generally I would suggest that they find a reputable online bank that charges NO fees whatsoever and start with said $5 at whatever deposit frequency they are comfortable with.  The other step is to make the process automatic. So, to be clear, this $5 will be automatically withdrawn from their checking account (wherever it is located) and deposited into the new savings account at their elected frequency.

I usually suggest starting with three accounts.  One should be for emergencies, another for vacation and the next would be something they desire to have, such as an account to handle annual taxes.  They can add other accounts later on when they see the need, after observing how the process works for them.

Once the process is rolling and they feel comfortable, they can then adjust the automatic transfer amount.  After all, if for example one is saving 5 dollars a week to pay annual property taxes, they would have accumulated $260 in a year.  That likely won’t satisfy their property tax needs, though one can see here that $5 a week actually turns into real money.  So, in this case, they would need to set the amount and frequency to be able to arrive at the target number when it is time to pay taxes. Once they get this going and stay up to date with what is required each year for taxes, this will be one less annual headache to have.

From this annual tax example, they are able to see how they can have a system in place to handle their periodic financial headaches. But they can also apply this to possible developments beyond that time-frame, such as securing a down-payment for a new home, etc.

Carlisle

Welcome to My Savings and Me. I have been blessed just enough to have a financially stable life for my family and myself. I have used simple saving and investing methods to make my money work for me and it is now my hope that information shared throughout this blog may ignite a fire in others.

4 thoughts on “How to Start Saving Without Delay

  1. Establishing the discipline to save in such a consumer focused society is crucial. Thanks for the great advice!

  2. Thank you so much Kevin. I appreciate the encouragement and yes, I have been working with them with ideas like these. Your parents were on top of it!

  3. I cannot agree more. I would also suggest that you teach your children to save like this as well. I remember clearly my parents taking me to the bank to open an account and deposit the $6 that I made from mowing a neighbor’s yard weekly. We got passbooks in those days as a record of our transactions. I felt pride at watching the savings total grow in that passbook.

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