It is important to save or put money back because of unexpected things that life tends to throw at us. Some people might also want to save money for something they want to buy later on down the road such as a car or other item.
Given our circumstances though it can be really hard to put any kind of money into a savings account especially if you’re living paycheck to paycheck. You might be wondering what is a good amount to put in a savings account and how much money you should put into one each week or whatever frequency might work for you.
A financial guide that I’ve used in the past called Financial Peace University has said that $1,000 is a good amount to have in a savings account as it tends to cover a large amount of sudden emergencies that might come up such as vehicle troubles, maintenance issues for the house or sudden medical expenses. Now you don’t have to stop saving once you reach a thousand dollars, but that is good amount that you should always try to have in your savings account or at least build back up to.
Let’s take a closer look now on how to save a thousand dollars a year. Now it doesn’t necessarily have to take you a year to save that amount, but if budgets are tight then there is a good method to where you can save a certain amount to reach the $1,000 goal.
How much money to put back Each week
As I said above, I know that budgets can be tight and it can be difficult to put any money into a savings account, but I believe that there is a minimum that should be put back each week to save up to your emergency savings account of a thousand dollars.
I put back $25 dollars every week. I don’t have to drive to my bank or set up anything there to do this though that is always an option. I’ve mentioned before that I have an online savings account. I did a recent review of the one I use which is Capital One 360.
I really like using it because it gives me peace of mind and because it takes 2-3 business day for the money to transfer to my bank account so I can’t just withdraw it on a whim if I get the temptation to spend the money on something other than what I should be saving for.
I like Capital One 360 because it has a little bit of a higher percentage of interest that your saving’s account can generate than a traditional bank. I can set goals of how much I want to save up and what I’m saving up for. I can also set up the frequency of how often I want to put whatever amount I decide into my savings account.
$25 a week has been good for me especially this year because I’ve been far more faithful in putting back money in my savings account and leaving it alone. In past years I would start doing that, but then something would come up and I would withdraw what money I had saved up and then stop the automatic transfer into my savings account for fear I would not have enough money to last me to my next paycheck in my banking account.
I’ve been much more disciplined this time and budgeting better so it has become a lot easier now to save money. A raise and a new position from my current job helps too. I’m nearly $200 away from reaching the one thousand dollar threshold and I will still continue saving after I reach it as well.
What I plan on doing is once next year rolls around, I’m going to increase the amount of money being transferred from my bank account to my savings account from $25 a week to $50 a week. That will equal $200 a month and will take me 6 months to reach another thousand dollars.
Whatever I get from my tax return as well is also going into savings. I’m also saving up for a big trip next year and should also have some money left over for emergencies.
Save up for yourself and your loved ones. It will help in the long run
This is what it takes, budgeting well and setting aside a certain amount each week that you can at least afford to do. Don’t cause yourself to go broke trying to save money, but set an amount back that you know you can do and still have money for your basic needs.
I know there are struggles and there are things that we want to purchase for our enjoyment, but I’m also learning to enjoy what I already have, not always go out and get the latest and greatest thing and I’m eating at home a lot more as well instead of always going out to eat.
Doing these things will definitely ensure that you can reach $1,000 in savings and putting $25 back each week is just the minimum I use and I’ve seen other places say that it is a good start to saving back money as well. Of course you can always put back however much you choose.
So there you have it, you now know how to save a thousand dollars a year and a good minimum amount each week to reach that goal. It does give me peace of mind to know that if something serious comes up, I should have the money to cover it.
Anyone can save money, you just have to discipline yourself to do it and budget for it. It is easier than you think, you just need to change your mindset. I’m glad that saving money is one of the things my parents taught me as I was growing up. My dad also made sure to save some money for me when it came time for me to go to college and trust me, every little bit helps.
What are you waiting for, start saving for your $1,000 emergency fund today. In the long run, you’ll be very glad that you did!