Making Savings Work within your Budget

by Rich Piatt

One of the most overlooked and difficult areas of our personal budget to manage are ‘savings’.  Immediate expenses often arise causing us to pull from what we had ‘intended’ to save.  It is much easier to focus on scheduled needs like groceries and billed expenses including utilities and cell phone payments.    

There are two major categories of savings.  First there are savings for periodic savings (short-term) expenditures.  Examples of periodic expenditures include costs that arise on a regular basis, but not each month.  Clothing, car maintenance, and automobile taxes are examples of periodic expenses.  The second major category of savings is long-term; including retirement, a down payment for a home, or a dream vacation.   

The challenge is ‘how can I make my savings plan work?’  Some suggestions follow;

1. Pay Yourself First:  In your budget put  your saving categories right behind the essential needs of housing, transportation, and food  and ahead of  discretionary expenses like entertainment. 
2. Have savings pulled automatically by your bank the same day you get paid.   When funds go to savings  automatically one tends to manage the budget with the dollars remaining.
3. Account for periodic expenditures   Savings for big goals like a special vacation, college, or retirement are often easier because one is more motivated by these large items, but periodic expenses like a $200 annual auto registration fee are often what take us by surprise.
4. Make savings a fun challenge:  There are a number of new apps that turn savings into what can become a profitable game.  An example is ‘PiggyMojo’.  This app helps you reward yourself for wise purchases and  where fiscal discipline is exhibited.  PiggyMojo will track your savings and improved spending habits in a game format.

The long term benefits of adequately saving for both short and long term needs will be of tremendous value.  A key to effective savings is to make it a ‘priority’ in your budget.  

If you have questions on savings please call 800-955-5765 to speak to a Credit Advisor or click here to get help now.