Money worries keeping you up at night? Here’s something that could get you on the path to sweeter dreams.
Did you know almost half of all Americans don’t have the cash to pay a $400 emergency expense?*
No wonder so many of us are staring at the ceiling when we should be sleeping!
We’ve got something that can help: setting up a savings account and giving yourself a goal of saving at least $1,000.
Why $1,000?
The short answer is that it’s a manageable goal for most people — even if it might not sound like it at first! And it’s a goal that could actually make a difference. Having $1,000 set aside could go a long way toward covering an unexpected expense and keep you from running up an expensive credit card bill (or, gulp, using a payday lender), having to borrow from family or friends or selling something to get out from under.
Our five-step plan to get that $1,000 saved
Step 1: Set a savings goal on Summit's Climbr®.
There’s lots of research to show people do a better job achieving their goals when they put them in writing. Summit’s Climbr tool is a great way to do that. It lets you set a timeline and tells you how much to save each week/month to hit it.
You can also use Climbr to track your expenses and to get transaction alerts. You’ll know when you’ve got an upcoming bill or are in danger of overdrawing an account — things that could put your goal at risk.
Step 2: Tell other people.
Know you’ll be more motivated if you tell others? Get on Facebook! Have joint finances? You need your loved ones on board to make this happen.
Step 3: Set up a savings account and call it “Emergency Savings.”
Have a separate, earmarked account and you’ll be less likely to dip into it for an impulse buy. Try to forget this money even exists — unless you have an emergency, of course!
Step 4: Pay yourself first with automatic transfers .
Tend to look at savings as the money that’s “left over” — and feel surprised and disappointed when there’s nothing left to save? Put yourself and your savings first and treat savings like a bill you have to pay. The best way: transfer money to savings as soon as your paycheck hits.
Step 5: Find that $1,000. Here are a few ideas.
- Use cash. You’ll spend less if you can’t pull out your debit or credit card when it’s time to pay.
- Cut out all unnecessary spending. Set a realistic timeframe for hitting your target (again, Summit's Climbr is your friend here) and make it a game you play with yourself and your loved ones. Who can think of the best free Friday night activity? Who can make the best homemade lunch? Who can find the best deals at the grocery store? And do you actually use things like cable and premium streaming options? If not, stop paying for them!
- Get a temporary, part-time job. This won’t be a solution for everyone. But if you’re motivated to get that money saved and have the flexibility it might be a good choice until you hit your target.
- Find better deals on things you have to have. We all need insurance, some sort of phone/Internet, food, gasoline and similar. Online research or a few phone calls could help you cut costs in all these areas.
You can save $1,000 — and Summit’s here to help make it happen!
Smart money tips brought to you by Red SHOES, Summit’s exclusive financial wellness program.
* Friedman, Zack. (May 24, 2018) “40% of Americans Can’t Pay $400 Emergency Expense.” Forbes. Retrieved from https://www.forbes.com/sites/zackfriedman/2018/05/24/money-retirement-student-loans/#41ccad291059
