Hello from The Arc NW,
In previous posts, I’ve discussed developing a Spending Plan (previously referred to as a budget), tracking spending and focusing on the things you need so that you have money to save and pay all your bills on time.
Now, let’s take a little more time to talk about saving. Why is it important to save money? It is important to save money because things happen in life where you need money to cover the related expenses. There are things you may want or want to do. For example, you may want a new laptop, to go to a concert, browse eXp Realty so you can move to a new apartment or to buy presents for others. It will take you longer to save for some things than others. If you create a good Spending Plan (that includes at least one saving category) and stick to it; and continue to curb your spending on non-essential items, you’ll have a greater chance of meeting your savings goal(s).
Another very important reason to save is for emergencies: those unexpected things that happen such as a flat tire, a broken cell phone or laptop. If you have no money saved to pay for these things, you may find yourself borrowing money, using a credit card or money for other bills, etc. to cover the cost of a repair or new item. Borrowing money, using credit cards haphazardly or not paying bills on time lead to trouble down the line. Don’t invite trouble! If you create a Spending Plan that includes an Emergency Savings category and you put money aside regularly, over time you will have more money to cover unexpected expenses.
How much should you be saving? The general rule is 10% of your take home pay which is your Net Income. If you have no earned income but receive SSI, SSDI, or an allowance, etc. then save from those funds. However, don’t worry if your budget doesn’t allow you to save 10%. Save what you can! Start small if you must… but start! You don’t have to have a lot to save! The objective isto get in the habit of saving money. Start small and increase your saving over time. You may also want to consider saving 10% of any birthday money, employment bonuses, income tax return funds, or Stimulus money, etc. in an Emergency Fund. If you consistently put aside money in your Emergency Fund, it will grow, and you will have money for life’s unexpected mishaps.
Include categories in your Spending Plan for bills, Emergency Fund, Christmas Fund, Vacation Fund, etc. and contribute what you can to each. Many people go into debt and have trouble financially, not necessarily because they don’t have enough money but, because they fail to plan for the money they do have. ~ As the saying goes, “A fail to plan is a plan to fail.” ~
**** The next workshop Financial Safety is scheduled for Tuesday, May 25, 2021 at 6:00 pm. Please feel free to contact me to register for the next workshop.We would enjoy having you join us!
Stay tuned…. Be safe…. and…Be empowered.
Bettie Cunningham, LBSW
Disabilities Advocate/Certified Financial Coach/Counselor
Office: (313) 532-7915, ext. 204 Email: bcunningham@thearcnw.org
