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Saving your money is an essential skill for thriving in life. It’s something many of us learn as children but don’t really master for quite some time after. There’s no shame in not fully understanding all the ins and outs of saving, especially when you’re first starting out and haven’t had much experience controlling your own finances. To help you along, here are three tips on how to build a robust emergency fund to get you started on saving.
Understand Your Budget
To start things off, you’ll want to fully understand your budget before making any moves related to saving. Far too many people jump right into squirreling away funds without any real plan. This usually results in breaking open the piggy bank a lot sooner than expected. First, figure out how much you make each month and how much you spend each month. Whatever is left over will give you an idea of your potential to save as well as how much you can expect to spend each month in a disaster. Next, set some real goals, such as saving a certain amount every month. Specific goals are easier to achieve than vague goals you don’t understand.
Chase Higher Yields
While hiding your money under your mattress may have worked in the past, you’re living in the future these days. As a citizen of the future, you’ll want to be keeping your savings at the bank, preferably in a savings account. You may think all accounts are created equal, but you’d be wrong there. If you weren’t already aware, banks will provide a small amount of interest on the total amount of money in your account at the end of each month. While it’s not much, it adds up at the end of the day. To really maximize your savings, you’ll want to find a higher-yield savings account.
Look for Ways to Save
Any extra bit of money can help you out in filling that emergency fund. That’s why you should always be looking for ways to save. Coupons, cutting costs, a tax refund, and even loose change in the couch all help. Figuring out creative ways to save is a particularly good skill to learn, especially if you’re someone who’s not really used to living on a budget.
When first starting out, figuring out how to save money for a rainy day can be a bit difficult on your own. Try these three tips for building a robust emergency fund to ensure you’ve got the money you’ll need to make it through tough times.
Read more great financial tips in this article: Saving Money in the Long Run—3 Products You Can’t Go Cheap On