Your First Quarter Financial Plan: Setting up a Savings Plan

posted 1/16/2014 in Banking

We’re continuing on with our plan to help you reach your financial goals and stick to your financial resolutions. When we were identifying our weaknesses in our “Looking Back” post at the beginning of the month, the number one weakness we came across was not saving enough money. 
Saving money is something that requires a plan and a goal. Here’s what you need to do to create a successful savings plan.
Open a savings account- if you don’t have one already, come by any LSB location to open a savings account. All you need is $5 to get started!
Create a savings goal- your first savings goal should be to create an emergency fund. This is an amount equal to three to six months of living expenses in the event of job loss, hospitalization, etc.
Pick an amount to save from your income- there is where most savings plans fail. People think they need to save a lot to get to their goals. However, think of it like this: if you get paychecks about twice a month and save $100 from each one, that’s saving $200 a month and $2,400 per year. An easy amount to start at is 10 percent of any income. So if your paycheck is $400, you save $40 of it.
Set up automatic savings- for those with an online banking account through LSB, you can set up to have a certain amount of money transferred from your checking account to your savings account regularly to help you save.
Pay yourself first- if you don’t want to set up automatic savings, then make sure the first transaction on payday is transferring your selected savings amount from your checking to your savings account. Money in your checking account is for paying others, while money in your savings account is money you pay yourself.
These tips will help jumpstart your savings plan and put you on the fast track to being a savings superstar. In our next post we’ll tackle the topic of budgeting to help bring together your checking and savings account.
Lincoln Savings Bank, member FDIC
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