Make Savings a Priority in your Budget
Often times, even though we know it is important, making savings a priority when budgeting can be difficult. Emergency expenses often come up, and we use those funds from what we had ‘intended’ to save. It is also much easier to focus on immediate scheduled needs like groceries, the mortgage, insurance and utilities.
There are two major categories of savings. First there are savings for short term expenses. Examples of short term or periodic expenses include costs that arise on a regular basis but not each month. School clothing, car maintenance, and automobile taxes are good examples. The second major category of savings is long-term. Examples include retirement, a down payment for a home or car, a pool, or a dream vacation.
Here are some ideas to try to make savings plans work:
- Pay Yourself First: In your budget, put your savings categories right behind the essential needs of housing, utilities, and food but ahead of variable expenses like entertainment.
- Have savings deducted automatically: When funds go to a savings account automatically from your paycheck, it makes it much easier.
- Make a list of your periodic expenditures. If you add up the periodic expenses and divide them out by pay periods, then you know the amount you will have to save each time within your budget.
- Make savings a fun challenge: There are a number of new apps that turn savings into what can become a challenging game.