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Is this the time to double down on savings?

How the pandemic could trigger our ability to work towards our dreams

You probably have that feeling like you need to save a little more. It may also feel like living gets in the way. So what do you do? It may sound strange, but the pandemic may be the thing that helps you figure out how to save money each month.

The pandemic forced you out of our old life. And out of old spending habits – going out, shopping trips, and more. This opens the door for you to start building saving habits that will help you work toward your down-the-road dreams. Whether that’s a house, a trip, a retirement, or whatever you're dreaming of.

It’s a good time to make sure we have an emergency fund in place to handle life’s detours ( like a pandemic). That means anywhere from 3 to 9 months of living expenses. This will help you survive a job loss, a furlough, or whatever life throws at you.

Now, on to those dreams.

To get started on saving for those dreams you have, let’s compare our spending pre-pandemic and during. Look at your bank account statements during these two times. What do you notice? How much less did you spend? And on what?

You can also just write down all the things you stopped doing or cut back significantly because of the pandemic. Things like dining out, movies, etc. Then estimate how much that saved you each month.

Now look at what you did to adjust to the pandemic. Maybe you cooked more meals at home, experimenting with new recipes. Maybe you went for walks or to the park where you could social distance (things that don’t cost a dime).

We don’t know what the future holds. But the past has taught us that we can be pretty resourceful at finding fun and interesting ways to spend our time – and doing it without spending a whole lot of money.

Add up what these low-cost activities saved you. Now think about incorporating these activities into your life in the future. Don’t think you have to eliminate all the fun things you missed doing. Just realize that you could mix in some of these low-cost activities. And, as a result, free up money you can use to fund those dreams. Imagine how much quicker could you save up for that down payment on a house. Or that trip of a lifetime. Or any of those dreams down the road.

Congratulations. You have just identified what you could save. And you’ve started creating a saving plan.

Start putting that money into a savings account

Now that you know how much you can put aside, it’s time to find the right place to put it.

You may have a tendency to let money build up in your checking account where you deposit your paychecks. That can be a problem for a couple of reasons.

  1. Money that collects in our checking accounts tends to get spent
  2. You could be missing the chance for that money to work harder for you by earning interest

Find a savings account that rewards you with a competitive interest rate. It’s even better if it connects to your checking account so you can easily or even automatically transfer money. Then, set up a monthly transfer of the money you identified that you could save. And set it up for the beginning of the month – before you’re tempted to spend that money. You’re ready to get started saving.

For more tips and other great savings know-how, check out the free Ruling Your Tomorrows ebook.

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