It can be overwhelming to think about the amount of money you’ll need for a big expense, like paying for a wedding or making a down payment on your first home. A great place to start is calculating how much you’ll need to save each month to meet your goal. For example, let’s say you’re planning to get married in 18 months and you want have $10,000 saved up to cover some of the wedding expenses. $10,000 divided by 18 months comes out to $555 per month.
There’s no secret shortcut to saving money—it takes time, effort and patience. But WSFS Bank, with 60 banking offices in Delaware and Pennsylvania, offers these five tips to help make saving a bit easier.
Even if you can’t afford to save enough to hit your goal in the allotted time, pay yourself first. Set up an automatic payday transfer from your checking account to your savings account. This way, you won’t be tempted to skimp on saving because you don’t have enough money “left over” toward the end of a pay period. (An even more foolproof method is to set up a direct deposit with your employer, since it’s much harder to cancel a direct deposit than it is to cancel an online banking transfer.)
Sen. Elizabeth Warren and LearnVest have both popularized the 50/20/30 rule, which recommends that you spend 50 percent of your take-home pay on necessities like food and rent or mortgage payments, 20 percent on savings and debt-reduction payments, and 30 percent on lifestyle choices (gym memberships and happy hours). If your take-home pay is $3,000 per month and you have no debt (good for you!), that means you should be saving $600 per month. Your savings may add up faster than you’d expect.
If putting 20 percent of your take-home pay toward savings and debt-reduction payments seems like a lot, then start small—even if it’s only $50 or $100 per month. Just like with exercise, even a little is better than nothing at all—and you’re much more likely to achieve success if you set small, achievable goals.
If you’re saving money for something you don’t expect to purchase for at least two or three years—a house, for example—you might consider contributing to a mutual fund, which generally has a higher rate of return than a traditional savings or money market account. You might also consider moving your money to a high-yield savings account in order to earn additional interest, but beware: The interest rate could go down, without warning, at any time.
It may sound simple, but this is a great way to amass a nice little savings pile, especially if you use cash on a regular basis. Whenever you feel your wallet getting a little too heavy or your pockets getting a little too jangly, dump the spare change into a jar and forget about it. We’ve heard stories of people saving $3,000 or more in a 5-gallon water cooler jug.
WSFS Bank is the oldest and largest bank and trust company headquartered in the Delaware Valley, where it has safeguarded and helped grow the financial success of customers, families, friends, neighbors and local businesses for nearly 200 years. WSFS provides comprehensive financial solutions through retail banking, commercial and small-business banking, cash management, mortgage and trust and wealth management.