Savings tips for those with no money to save

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Savings tips for those with no money to save
1 year ago
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Everyone knows it is important to put money aside for a rainy day, but actually finding that extra money can be quite a challenge. One of the most common reasons people give for failing to save is that there is no money left at the end of the month. When there is no money left over after paying bills and meeting routine household expenses it is nearly impossible to build up either a short term emergency fund or a long term nest egg.

Even so, it is important for every worker ??no matter how much or how little they make ??to pay attention to savings. Without an emergency fund the loss of a job or a sudden unexpected expense could be devastating. Living from paycheck to paycheck is always dangerous, but when job losses are rising it can be even more so. But when workers have an emergency fund in place they know that they will be able to meet their basic living expenses while they look for a new job. Just having an emergency fund in place can greatly reduce the stress and anxiety associated with job loss.

Finding the Money You Don?셳 Have
So how do you find money to save when you?셱e tapped out at the end of the month? To answer that commonly asked question let?셲 take a look at your paycheck ??not the money that actually lands in your bank account but the full amount your employer pays you for the work you do.

If you haven?셳 done so already pull out a copy of your most recent pay stub. Look not at the net pay you receive but the gross pay your employer actually paid you. Chances are those two numbers are quite different, with the gross pay substantially higher than what you actually receive. That is because all of your taxes, including Federal income tax, state tax and Social Security tax, are withheld from your paycheck before you even receive it. If the tax rate were to go up you would need to learn to make due with your new, lower net pay amount.

Make Your Savings Automatic
If you are like many workers you did not even realize how much money was coming out of your paycheck. Most workers simply ignore the gross pay and just look at what they make. Those workers may not even now how much they pay in taxes, since that money never lands in their bank accounts.

Savvy workers can use the same strategy to build up their savings. Taking money off the top ??right out of the paycheck ??accomplishes a couple of important goals. For one thing this type of strategy helps to instill fiscal discipline, forcing you to live on the amount you have left. No matter how tight your budget may be, chances are you will not miss an extra $5, $10 or $20 coming off the top of your paycheck. If you are unsure of this strategy start with a small amount and then work your way up slowly over time. You may be surprised at just how effective this strategy can be.

The easiest way to put this strategy into practice is to set up a separate savings account at your bank and have part of your paycheck directly deposited into it. Many banks offer free savings accounts with no minimum balance requirement, so finding one should not be difficult. And setting up the direct deposit is as simple as filling out a form from your Human Resources department. If you start today you should be saving within a month.

Invest Your Windfall
If you have the good fortune to receive a bonus or other additional money at work, putting that money directly into your savings account can help your nest egg grow. The same is true of money from any side jobs or additional projects you may take on. Try to get into the habit of putting any ?쐃xtra??money aside. This will help you learn to live on less than you make, while at the same time building up your short term emergency fund or long term nest egg.

This strategy can be applied to your annual tax refund as well. If you receive a big refund each time tax season rolls around you may be tempted to spend that newfound wealth on lavish items, but a smarter strategy is to save that money for a rainy day. If you want you can allocate a small portion of the money to purchase that new flat screen TV or other item you have been craving, but put the rest right into savings. This will help you boost your balance while instilling the kind of financial discipline that will pay off big down the road.
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