Building Your Nest Egg In Tough Times

Building Your Nest Egg In Tough TimesThese days, it seems that everyone is having a tough time financially. While it may seem that every cent you get paid has to go to a bill, gas, or food, building a nest egg is more important now than ever. Having some money squirreled away can be a blessing if your car breaks down, you lose your job, or someone in your family gets sick, particularly if you live from paycheck to paycheck. Saving can be surprisingly easy, and sometimes even fun!
The first step towards saving up is making your money inaccessible. Open a savings account with a different bank than the one you usually use, but make sure you won’t get charged any fees for doing so. If your chosen savings bank is hard for you to get to, open a checking account as well and get a debit card. Next, pay yourself first. Visit your primary bank, and set up a direct deposit into your new savings account. Make sure it goes into savings, or else you won’t get any interest from your hard work! Once you have the direct deposit set up, take that shiny new debit card and put it somewhere you can’t access it without a fight. One idea is to fill a plastic container partway with water, put the card in the middle of the container, and freeze it. You could also tuck it away with your out-of-season clothes, or in the back of your spice rack. Just make sure you won’t be tempted to reach for it except in a dire emergency.

You may be thinking, “I can’t afford to put money into savings every month! I barely squeak by as it is.” That is not true. You can save, but you may have to sacrifice a little bit to get there. If coming up with the money seems impossible, it’s time to make some changes. Sit down with all the bills you’ve gotten in the past three months, and prune ruthlessly. Any redundancies in your services need to be trimmed. If you have an internet video service and cable, cut one out. If you’re paying for a house phone and a cell phone, get rid of the house phone. Never pay twice for similar services.
Once the redundancies are gone, it’s time to trim the fat. Take a really critical look at what you’re paying for. Do you have “extra” services attached to any bills, such as ring back tones or payment protection on credit cards? Get rid of them. The chances of ever having to use payment protection don’t make it worth the money you pay every month, and no one is going to be disappointed that they don’t get to hear a song every time they call.
Finally, use a budget and revise it regularly. Make sure you pull up your calendar and check what unusual expenses are coming up that month, such as birthdays, annual bills, or pre-ordered video games. Don’t forget to budget them in! Don’t forget, even little expenses add up. Every penny saved is a penny that’s earning you interest, and interest is money you don’t have to work for. If seeing your savings expand isn’t rewarding enough for you, try setting goals and rewarding yourself with a small luxury once you reach it, such as a coffee from an expensive chain or a new video game.
If you have debt, your primary goal should be to get out of it. Save a little each month ($100 or so), but focus your new found income on reducing your highest interest debt. Don’t ever stop saving to get rid of your debt, because if an emergency pops up before you’re debt free, you’ll be right back where you were. Once all your debt is paid off, put the money you were using to it off into savings, and bask in the financial security!