Does your savings or retirement account look pretty bleak these days? Or maybe you haven't saved anything at all for your future. If so, don't get overly worried about it. Now is as good as time as any to start setting some money aside and building a nice nest egg for yourself. So where to start? Implement these easy tips and you will have a good amount saved up in no time for retirement or paying off existing loans.
Set Aside a Percentage of Each Paycheck
It's important to deduct a specific amount from your paycheck each week and then tuck it into savings. This way you won't even notice that it's gone. If your employer does direct deposit, you can set aside what amount you want to go into your savings or IRA ahead of time. Try to have it in a completely separate account from your traditional checking and savings. Use some of those funds to chisel away at bank loans you may have with a high balance. This will help you pay less interest and fees in the long term.
Open an Interest-Bearing Savings Account and Pay off Old Debt
An interest-bearing or high-yield savings account is another way to build up a good retirement account. In regards to deposits, the more money you put into one of these accounts, the higher the return rate. While a few hundred dollars a year in return may not seem like a lot, over the course of 25 years, it can really add up. This should be another outlet where you money can grow over time. Just remember that paying off debt takes precedence over savings. If you have any old accounts that have gone into collections, pay these off right away with any extra money you have set aside.
Get on a No-Spend Budget
Do you find yourself spending most of your paycheck before you can even get your hands on it? Frivolous spending is an easy way to go overboard with your money, get behind on bills, and bury yourself in debt. The best way to remedy overspending is to get on a tight household budget and stick to it. In addition, consider taking out a home equity loan to help pay off high-interest credit cards. This will help improve your FICO score and credit utilization ratio because your debt load has been reduced. This allows you to keep more money in your pocket that can also go toward savings and your 401k.
Building up your nest egg is important, no matter what financial shape you think you'll be in when you retire. But if you need to borrow money for immediate financial needs, be sure to choose a loan with good terms and a low APR. This helps you control your debt load and see a light at the end of the tunnel. There is no such thing as having too big of a savings account or retirement fund. Saving now will bring you peace of mind later.