Let me introduce myself: I’m a young professional who recently relocated to the Washington, DC area from Nashville, Tenn. My income increased as a result of the move — but so did my cost of living. The city is full of opportunities and I want to experience them all, while also building up my savings.
I will chronicle my journey to financial independence by saving $2,000 over the next six months. Please note, I started with a balance of $0. I see that Brandon is also in pursuit of $2,000 in savings — over 4 months. Maybe I can pick up a few tips from him.
Month 1
Like many young professionals, I’ve often found myself living paycheck to paycheck; with little to no money left over to pay off outstanding credit card balances or to even think about saving more toward retirement. I’ll admit, my finances haven’t always been in order, and I was more than a little skeptical to set aside money for anything other than a Saturday night out on the town. I’m 25, why would I need to think about saving? But then, reality set in … I’m 25 and have not built up any savings. That means no savings for travel, no savings for a rainy day or emergency fund, and certainly no savings for my eventual retirement. So, how can I build up my savings over time?
As a young person, it’s easy to get distracted when it comes to saving, but there are some simple ways, that you may have never considered, to save money on a regular basis.
- Transfer funds into a separate savings account, using your bank’s online transfer feature. As soon as you get your paycheck, have your bank take a percentage of your payment out of your primary account and transfer funds into your savings account. That way you won’t miss the leftover funds or spend it frivolously. Choose an amount you feel comfortable with — generally, I deposit around 20 percent of my paycheck. This month, I transferred $500 to my savings account ($200 went toward my credit card payment; the other $300 remains in my savings account). Keep in mind that you should consistently monitor your accounts and set up safeguards designed to prevent identity theft and other fraud.
- Use your bank’s “keep the change program.” Some banks have a rewards program in which you can opt to round your tab to the next whole dollar and keep the remaining change. Of course, it’s better to avoid spending your money in the first place. But when you must, this might work for you. This month I saved $176.00 by using my bank’s program.
- Assess your monthly spending. Look at your monthly budget and decide what expenses can be minimized. For example, this month I reduced my “grooming” budget by simply getting a polish change every month for $7 as opposed to a full manicure for around $20.
Total savings this month: $476.00
Savings balance: $476.00 (Stay tuned for my total savings next month.)
AC: 0112-5454
Leave a comment: