A recent study conducted by Go Banking Rates has shown that a large number of Americans have under $1,000 in their savings account. At least 62 percent or one in five Americans have some savings, while 21 percent said that they don't have any savings at all.
"It suggests that they likely don't have cash reserves to cover an emergency and will have to rely on credit, friends and family, or even their retirement accounts to cover unexpected expenses," according to financial expert Cameron Huddleston.
Most people have a tough time saving money even with full time jobs. However, it is easy to learn how to budget your earnings, so that you can actually begin saving instead of scrimping. Below are some tips on how to properly handle your money:
1.) It seems easier to avoid saving, but only because many are not educated when it comes to finances. Where should you save? What plans or schemes should you invest in? Start by learning about finance by doing some reading. A lot of information is are available online, including discussion boards like Saving Advice, Money Talk, or Reddit's Personal Finance.
2.) Change your mind set about savings and understand that saving takes time and effort. "People don't want to feel deprived, and many feel the same way about saving as they do about going on a diet," said psychologist Nancy Molitor, via Go Banking Rates. "They feel they will have to give up more than they are willing to, or they might feel they don't have the skills to be able to keep it up."
"Most people spend some money, pay their bills and save what's left," said financial expert Nancy Butler, via Forbes. "And that's backwards: You should be saving for your financial goals first, paying your bills and then consider spending the money you have leftover."
By changing your views about money, you can condition yourself to begin saving and hopefully keep at it.
3.) Start small. Make it a goal to put away 10 percent of your monthly earnings and make this system automatic. Banks have services that offer auto-transfer to the savings account of your choosing. This way, you won't be tempted to spend money that should've been for your savings.
4.) Keep track of your spending and do proper budgets every month. This way, you'll have an idea where most of your expenses go, and then make an effort to cut back on these if these are not critical expenses.
5.) Try to find ways to earn extra money, which you can add to your savings account. By working extra, you can also lessen idle time that would entice you to spend more.
