Many people believe that in order to save money they must have a large amount to put into savings or to invest. Of course, this is not the case. There are many ways and many amounts that you can begin to save money. And the most important aspect is just to start. Some great ideas are a daily savings amount, a weekly amount, an amount taken from each paycheck, or a consistent automatic transfer.
Daily Savings
Any amount big or small is not the most important aspect of saving money. For instance, take an empty mason jar and commit to placing an amount in it every day. It can be as small as 50cents. If you place 50 cents every day for 1 year you will have 182.50. The key to this plan is consistently sticking to an amount that you can handle.
Weekly with envelopes
In this technique, the suggestion was to take 100 small envelopes and label them 1-100. 1x a week randomly pick 2 envelopes and place that amount of money in each and tuck it away. In this example, you will have saved 5,050 dollars in 1 year. The problem I had with this method is that let’s say I pick 2 large amounts. I don’t necessarily have that kind of money. so sometimes I would have to redraw a different envelope. What I found out was more manageable was using 50 envelopes and not 100. I pick 1 envelope a week. this was a more manageable method. Of course, you will only have 1,275 dollars. But again some is better than none.
weekly auto transfer
Sometimes, an automatic weekly transfer to an account that is not easily accessible is a good way to save. I use credit karma has a savings account option and I have a small set amount that is easy to handle but over time adds up to quite a bit of a balance.
paycheck method
There is a nice option that if your job has auto deposit of your pay check you can allocate an amount to a separate account and the rest goes in to your bills account. This helps in that you never really miss the amount placed in the separate account. This is especially true if you get a raise. By allocating that new raise amount to a separate account you don’t rely on it and you never miss it.
Conclusion
No matter which method works for you, it is most important that you start. I actually use 2 of the methods. I have a Kredit carma savings amount, I use the 1-50 envelope method. The 2 methods allows me to accumulate a small amount so that I can build an amount that I can invest when it gets to a certain amount.