Careful with PlasticThe Plan: To withdraw each week’s spending money from the credit union in cash. When it’s gone, it’s gone.
The Purpose: Cutting back on impulse purchases.
Financial planners warn about never being able to reach long-term goals because daily buying decisions don’t support the bigger picture.
Tuck your designated spending money into an envelope each week. Treat it like your allowance for the next seven days; all purchases—that special latte, movie tickets, a new dress—must come from this cash. Research has shown that merely the act of relying on cash makes you likely to spend less. You’re giving up something physical, while with a credit card it almost doesn’t feel as if you’re paying. Plus, few things make you question whether you really need that manicure like realizing you only have $20 left for the rest of the week.
It’s always good to keep a credit card for emergencies or for use when making travel deposits, etc. but don’t depend on a card for everyday living. Kingsport Press Credit Union has a low-rate Visa card for those special situations.
Set up “Auto-Save”The Plan: Set up regular account transfers or deposits that feed your savings on a steady schedule.
The Purpose: To sock away cash for retirement, an emergency fund, and fun goals like a vacation, before you can even miss it (much less spend it).
Doing this literally automates your savings so money for things you care about won’t get spent on things you don’t.
Begin by making a list of everything you want to save for, from necessities (car insurance) to your dreamiest goals (next Christmas in Cabo). Once you take care of the basics, you can divide up what’s left. Open enough new savings accounts to hold each of your stashes. Kingsport Press Credit Union can assist with this and even lets you name the accounts according to your goal, like “new car fund.” Lastly, set up automatic transfers or direct deposits that’ll move money into each account on payday. Little drips add up: With just $30 from each paycheck, in a year you’ll have $780.
It helps you to visualize where your money is going. After a while it becomes such a habit that you just get used to not having the funds in your paycheck and forget it exists until the big day comes that you have enough for that goal you’ve been saving for!
Source: Redbook Magazine, Kenrya Rankin Naasel