All VyStar Offices will be Closed on January 21, 2019, Martin Luther King, Jr. Day
By: Shannon Cornejo, Member Relationship Specialist Supervisor
One morning, as you’re driving to work, your car suddenly breaks down. At the repair shop, you find out that you’re going to have to spend major cash to fix what’s wrong with your vehicle. Unexpected expenses—like car repair, home improvement, family obligations and more—can pop up at any time. And if you’re already trying to make ends meet with your everyday financial obligations, these surprises can deal a pretty big blow to your budget when they catch you off guard. But how do you plan for all those extra expenses? How do you budget for the big things (like buying a new water heater for your house) all the way down to the small things (like attending your cousin’s upcoming wedding)? There are all sorts of methods to simplify budgeting. Here are a few ideas that might help you get through the year … especially during those tight budget months!
During my career as a Membership Relationship Specialist Supervisor, I have helped people who save money for a rainy day in all sorts of ways: taking advantage of credit card reward points, taking the DIY route whenever possible, or re-gifting unused gifts. I would like to suggest an alternative for those of us who may not be talented enough to take on Pinterest-worthy DIY projects: a savings plan! Saving throughout the year is something that requires strategy, patience and, most of all, willpower.
It’s easier to save money when you have a reason for saving. For example, everyone in my immediate family was born in December, right in the middle of the holidays. One January, I prepared myself by opening a savings account that I would only use for gift-giving the next holiday season. I even went as far as nicknaming the account “December Savings” so I wouldn’t touch it throughout the year for any other reason. To further prevent myself from spending that money, I set up an automatic transfer so I wouldn’t have to even look at my balance.
You might be thinking, “I can’t save; I have nothing left over after I pay all my bills!” I know I’ve already asked you to have willpower. Well, now I’m about to ask you to step outside of your comfort zone: Always pay yourself first! Aries Jimenez, a financial planner for San Diego Wealth Management, says, “It is much better to pay yourself first by creating a savings goal each month, then paying fixed expenses and budgeting the rest for variable spending.” Consider setting aside a small amount of money each paycheck before you pay anything else. So when those months come around when money might be tight, you’re already prepared!
Here’s one final idea: Whenever you take money from an ATM, a teller or a store cashier, take 10 percent of that amount and put it in a jar at home. As a woman who has made her career working in the banking industry, it is painful for me to advise you to save in a way that will not earn you any interest. But if a savings plan is simply not possible through automated transfers and actual savings accounts, let’s scale things down and go basic. Make saving money a family event! Encourage your children, spouse and other family members to contribute as much as they can to your jar for events that you participate in together. Make it as fun as possible and see how much you can save by the end of the year. It’s a great way to save, plus it teaches your children good saving habits.
No matter how you map out your spending, any savings plan is better than no plan at all. Every dollar adds up! When you set up a strategy to regularly save for unexpected circumstances and make arrangements for large future expenses, you can avoid finding yourself in tight financial situations. Most credit unions offer assistance if you need help setting up a savings plan or resolving a tricky financial situation.
*The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.