Saving for Tough Times

When fighting your way through tough economic times, it is better to try and face down these money troubles instead of closing your eyes and hoping they’ll go away. They won’t. There are many steps you can do to minimise the impact of the economic downturn, and they must be taken now.

Accumulate funds for emergency savings. It is important to save money in an emergency savings fund where you have immediate and penalty-free access. As a general rule its good to have enough in your savings to survive without an income for around three months. The best place to park this money would be in a high interest savings account.

Save more. Try to arrange for an automatic savings plan. This arrangement enables you to set aside specific amounts of cash automatically transferred from a checking account to savings accounts earning high interest or to a mutual fund of your choice. A high interest savings account should be used but you should choose one with easy access. A retirement fund will not do it because this is money you won’t need for quite a while.

Spend less. This move may be obvious, but it can be a very hard step to take. Lump into one account all the phones at home (landline and mobile). By bundling your communications you can normally get substantial discounts. You should compare the deals on the market to find the best value deal. Spend less on your groceries by joining a food co-op or buying only generic or supermarket brands. Bum rides in a car pool or take public transport instead. If you have two cars and one is seldom used, consider selling the other one. Put all the money you save in a high interest savings account intended for the rainy days.

Reduce credit card debt. You have to find ways to stretch your money further in tough times. It does not make sense to shell out your hard-earned money to pay 17 per cent (or whatever) interest on credit card debt. Try to pay off in full the balance due each month; if that is difficult, at least pay much more than the minimum amount. Consider moving from credit to Visa debit

Increase household income. During a recession this can be difficult. You may be able to find creative ways of bringing in additional funds using your skills. If you write, or do photography, or are able to do some other marketable skills, you can try freelancing on your spare time. In single income households the partner could try and take on casual or one off jobs for extra income. You could start a small business which might blossom into something bigger once the recession is over.

Make use of allowable tax deductions. Be on the lookout for tax deductible expenses such as education, charitable donations and your home office. Be religious about keeping every related receipt, so you can use these to support tax deduction claims. Put the money saved on personal tax deductions into your high interest savings account.

Spruce up your résumé. Recessions can lead to more layoffs. It is best to polish the résumé to make it current, in case the need to apply for a new job arises. Try and get the resume down to one or two pages to keep it to the point. Make it presentable, but not flashy. Highlight your relevant work skills and experience.

Act quickly to protect your finances from the recession. This will give you a strong sense of purpose even as it shores up your position.

Saving Faster With Savings Goals

Saving money takes time and discipline, but with the right strategy and a good savings account you can reach your savings goals a lot faster than you might think.

Many of the good things in life cost money and saving for big items like cars, boats, or even houses, can take months or years. It is possible to hit your savings goals and get the things you want much faster with a well planned strategy and goals.

Before you begin to plan your saving strategy, you should open a high interest savings account if you don’t already have one. This will allow you to keep your savings completely separate from the rest of your money and will pay a higher interest rate. Also, if you are willing to leave the money untouched for a certain number of months, or even years, you should be able to get an even better interest rate. The market is flooded with savings account offers so do some comparison to find an account with high interest and low fees.

It’s time to start making some real goals once your savings account is ready. As with much in life, it all comes down to time and money – how much you want to save and when you want to have it by. Search online for a ’savings goal calculator’ to see how much your going to need to save to hit your goals and how regular deposits and interest rates can impact this.

Don’t stretch yourself too far. If necessary, establish a longer timeframe so you can save without putting yourself under too much pressure. Alternatively, you could take a detailed look at your personal spending to see how you can save money here and there. Are there some day-to-day luxuries you are willing to part with to help you reach your savings goals?

The best thing to do now is create a household budget to get a good idea of all your typical ingoings and outgoings each month. It is better to over-estimate here to make sure you have enough to live comfortably. If you find you have money left over each month you can easily deposit to your savings account.

Once you do your calculations and decide how much you need to put away each week/month, there are a few steps you can take to make the process easier. First, you should arrange regular auto-deposits into your savings account from your checking account as soon as you are paid. Another option is to ask your employer if they can split your salary payments to some of your pay goes direct to your savings account each paycheck. This will reduce the temptation to spend and get your money working for you in your savings account as early as possible.

If you can do so it is critical to avoid debt wherever you can. If you have longer term, larger loans then you will just have to factor that into your budget. However, any new debt, and especially credit card debt, should be avoided at all costs. Attempting to save while trying to tackle an expensive credit card debt is like taking one step forward and two steps back.

Reaching your savings goals may seem difficult at first but stick to your plan and the money will start to grow. For longer-term savings goals you may find that your circumstances change during the process and you can save the money even faster than expected.

Article by Richard from Click 4 savings comparison group of sites which compare products including. Visitors can compare products including NAB savings and then apply online with the bank.