GRAND RAPIDS, MICH. – Many Americans struggle to put money away and are living paycheck to paycheck. America Saves Week is February 26 – March 3. The idea is to help people gain the tools the need to save money for the long run by making some changes.
Tom Jacobs from Jacobs Financial Services joined us in studio to discuss some of the tips he has for people working to put more money aside.
He suggests four major things to help get you on the right track.
- Take one hour each day this week to get both your finances and your home in order.
- By cutting out clutter, you may find extra things around your house to sell. You might also find duplicate items like batteries or lightbulbs that you can now take off your shopping list.
- It’s also important to organize your finances by taking inventory of your accounts. A lot of people have multiple accounts or even use multiple banks.
- You should make a list with the type of account, information on how to access it, the account holder and the contact information.
- If you’re married, review this list with your spouse. It is also recommended that those who are in retirement go over that list with their adult children.
Create a budget
- You know how much money is coming in every month, so you need to know how much is going out.
- Use one hour of your day to write down every expense you have for the month. Include big bills like your rent or mortgage and your utilities.
- It’s also important to include how much you are spending on food and entertainment.
- After you balance your finances, you can then determine how much money you are able to put into a separate account and save each month.
- There is a budget worksheet on the Jacobs Financial Services website website, jacobsfs.com to help you get started.
Automate your savings
- It is recommended that you put 10-15% of your paycheck into a retirement account like a 401(k).
- After determining how much money you are able to save, set up automatic withdrawals.
- The best way to do this is to take the money right from your paycheck and put it into your retirement account.
- You can take it a step further by setting up automatic transfers from your checking account to a savings account or emergency fund.
- By automating your savings, you won’t forget to set money aside each month. If it’s coming directly from your paycheck, you likely won’t miss it.
Deal with debt
- It’s easy to feel overwhelmed by debt, so it’s important to get organized and make a plan to pay it off. Start by organizing your debt by account, total amount due, interest rate and monthly payment.
- Begin by attacking the lowest balance first while making minimum payments on the rest.
- Once you get that first account paid off, take the money you were putting toward that and move that to the second lowest balance. By watching your debt disappear, you’ll gain momentum to keep going. Continue to do this until you don’t have any more!
- By taking care of your debt and the interest you pay on it, you will save yourself money and stress down the road.