Don’t wait – invest in your future today.

Money is tight. For many families, money is always tight. Things just seem to keep coming up, even when your best intentions are to pay off that credit card or start a savings account. Some financial advisers tell you that you should pay off high-interest credit cards before you put money into savings, which is true, to a certain level. However, if you never quite get your high-interest credit cards paid off, you’ll never have money to put into savings. And when you don’t have savings, you have to use that high-interest credit card for emergency money. That’s where the vicious cycle starts.

The truth is, there’s almost never a good time to start a savings account. If you wait “until” something happens, until you pay off your credit card, pay down your student loan, or buy that new television you’ve been eyeing, you’re practically guaranteed that something will come along and sidetrack you. It’s in the nature of procrastination. You’ll find a thousand reasons to spend that money elsewhere, and some of them are probably very good reasons, but savings are investments in your future. The bottom line is, you simply can’t afford to put it off.

The problem that many people face is finding the extra cash for a savings account. The trick to doing this successfully is twofold: putting aside a small amount of money, if you can’t spare anything larger – just so you’re putting something in; and having the funds electronically debited from your account.

First, give yourself permission to start your savings account modestly. You don’t have to wait until you can spare $100 per month – if you can only start by saving $25 per month, then save $25 per month. Just cut out one meal dining out, and you’ll have the money to begin investing in your savings account. As you watch the total grow, you’ll get more excited about your savings account and it’ll be easier for you to find ways to cut spending elsewhere to put money into savings. Then, you can watch it grow faster.

Second, have your funds electronically debited automatically every month. You can set this up through your bank in person, you can set it up online if your bank offers electronic banking, and you can even set it up through a third-party online savings option, such as ING Direct. Shop around when you’re setting up a savings account – look for something that’s going to give you decent interest. For this reason, online savings options are sometimes the best; ING Direct offers very competitive rates, and even some big-name banks offer good rates online.

Regardless of who you use, the point is to have your funds debited from your account
automatically. That way, you won’t have to stop and think about whether you have the cash – just treat it like any other bill, and make sure you have the money in your account. It might be a good idea to set up your electronic debit for the middle of the month, away from the strain of rent or house payments and other beginning-of-the-month bills.

Don’t wait – start a savings account and invest in your future today. You’ll be glad you did a few years down the line when you need that money, and it’s actually there for you.

-Money Maven

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