Did you know most financial experts recommend setting aside enough money to cover three to six months’ worth of expenses in the event of a major financial surprise?
That’s because a well-funded emergency account has the potential to get you through tough times without the need to spend other savings such as assets earmarked for retirement and college.
The following tips will help you start saving more right away:
Stick to a budget
Creating a budget is easier and more important than you may think. Simply write down the amount of your household’s total monthly, after-tax income then identify how much money you need to spend every month on bills, groceries and any other living expenses. Next, subtract the latter amount from the former. The difference represents the amount of money available to be set aside for important goals, such as building emergency savings. Try to maintain financial discipline by avoiding unnecessary impulse buys that aren’t in your budget or on your shopping list.
Buy in bulk
When it comes to smart shopping, bigger is often better. Usually buying one item at a time is more expensive than buying larger quantities. For example, instead of purchasing one can of food at a time, you may be able to find the same item at a much lower unit cost when they’re sold in bulk at a discount retailer or shoppers’ club. While you’ll spend more up front, the price is lower per individual item and may help improve your bottom line within a month or two.
Reduce the cost of debt
Every month, millions of Americans spend their hard earned money on interest and finance charges that arise from carrying personal debt, such as credit card balances. Take advantage of today’s exceptionally low interest rates by transferring high-interest debt to a single, low-rate account. Also, if you own a home, considering paying off the entire balance with a tax-deductible home equity loan*. Avoid unnecessary debt by not using a credit card to buy things you can’t afford.
Finally, whenever you’re expecting a tax refund, bonus or other windfall, be sure to put it to good use. Paying off debt and saving for the future are almost always better strategies than spending without a plan.
Having multiple savings accounts can be overwhelming. Take some of the pressure off by setting up automatic transfers from your checking to savings. Contact one of our bankers to learn more or get started.
Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. South State Bank and South State Investment Services are not registered broker/dealers and are not affiliated with LPL Financial. Advisory Services offered through LPL Financial, a Registered Investment Advisor.
*Please consult your tax advisor for tax related issues.
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