Building a solid savings account

It’s always important to have money in the bank in case “something” happens. Living paycheck-to-paycheck is no way to live a healthy financial life.

For example, financial experts suggest that at the minimum, you should have three months of living expenses saved up should you become suddenly unemployed. That’s just one example of how to prepare for a rainy day. Here are some other ways to build a healthy and immediate savings account.

Create a budget

Find out how much you need to spend on your living expenses, debts and investments. Determine how much you need for consumables such as gas, eating out, a night out on the town, etc. Then STICK to that budget. It may be hard to do but it will make your financial future healthier now as opposed to later.

Make saving part of your monthly budget

Are you ready for retirement? Set a portion of your paycheck to deduct automatically into a retirement account. In addition, put a certain percentage, ideally 10-20 percent, into a savings account. It can any type of deposit account, including a general savings, an investment or something else. The goals is that the account will help you build a solid cash base for the future.

Don’t spend beyond your means

Be sure you monthly spending doesn’t outpace your monthly income. Determine how much you need to pay your bills and other debt before spending money on frivolous items. Stick to a certain dollar amount and once you reach it, you’ve reached your spending limit until the next pay day.

Keep debt to income ratio low

The less you have to pay toward a long-term financial commitment, the more you can save for yourself. It’s that easy. Find out how you can open a savings account with Travis Credit Union.

Crunch the Numbers