By Brittney Schori
Health and Human Sciences Extension Educator, Purdue Extension Whitley County

Brittney Schori

COLUMBIA CITY — When was the last time that you revisited your finances? Are you saving just as much money as you did 3-5 years ago? Are you prepared if an emergency happens?

This is just one of many reasons why saving money is crucial. It can help provide financial security in case of emergencies, help avoid debt and support long-term goals like buying a home or retiring comfortably. It also opens up opportunities for investing, allowing your wealth to grow over time. With savings, you can handle unexpected expenses without stress and make smarter financial decisions. Ultimately, saving gives you peace of mind and greater control over your financial future.

Here are just a few general tips when thinking about saving money!

Build an emergency fund. It can make all the difference. Low-income families with at least $500 in an emergency fund are better off financially than moderate-income families with less saved up. Learn more about emergency funds here.

Establish your budget. Are you looking for an easy way to begin? On the first day of a new month, get a receipt for everything you purchase. Stack the receipts into categories like restaurants, groceries and personal care. At the end of the month, you will be able to see where your money is going clearly.

Budget with envelopes. If you have trouble with overspending, try the envelope budget system where you use a set amount of money for most spending. Once the cash is gone, it’s gone. When using the envelope budget, put specific amounts of money into envelopes (physically with cash, or electronically with an app or spreadsheet) representing different budget categories. Once you have exhausted funds in an envelope, you can no longer spend within that category until the next month. If you have remaining funds at the end of the month, you have a few options. You can roll over the funds into the same envelope the next month, transfer the funds to a different envelope, or put the funds into savings for a later date. I recommend adding the remaining funds to your savings account.

Don’t just save money, save. There’s a difference between saving money and saving money for your future. So don’t just spend less, put the money you save into a savings account to plan for college expenses, retirement, or emergencies that can leave you financially better off. Learn how to make a pledge to yourself and create a simple savings plan that works by clicking here.

Save automatically. Setting up automatic savings is the easiest and most effective way to save, and it puts extra cash out of sight and out of mind. Every pay period, have your employer deduct a certain amount from your paycheck and transfer it to a retirement or savings account. Ask human resources representative for more details about how to set this up. Or every month, have the bank or credit union transfer a fixed amount from your checking account to a savings or investment account. Learn more about automatic savings by clicking here.

Aim for short-term savings goals. Make a goal such as setting aside $20 a week or month, rather than a longer-term savings goal. People save more successfully when they keep short-term goals in sight.

Start saving for your retirement as early as possible. Few people get rich through their wages alone. It’s the miracle of compound interest, or earning interest on your interest over many years that builds wealth. Because time is on their side, the youngest workers are in the best position to save for retirement. Learn more about saving for retirement and the different account options by clicking here.

Take full advantage of employer matches to your retirement plan. Often as an incentive, employers will match a certain amount of what you save in a retirement plan such as a 401(k). If you don’t take full advantage of this match, you’re leaving money on the table.

Save your windfalls and tax refunds. Every time you receive a windfall, such as a work bonus, inheritance, contest winnings, or tax refund, put a portion into your savings account.

Save your loose change. Really! Putting aside just 50 cents over a year will get you 40% of the way to a $500 emergency fund. Some banks and credit unions or apps offer programs that round purchases to the nearest dollar and put that money into a separate savings account.

Use the 24-hour rule. This rule helps avoid purchasing expensive or unnecessary items on impulse. Think over each nonessential purchase for at least 24 hours. This is particularly easy to do while shopping online because you can add items to your cart or wish list and come back to them a day later.

Treat yourself, but use it as an opportunity to save. Match the cost of your nonessential indulgences in savings. So, for example, if you splurge on a smoothie while out running errands, put the same amount into your savings account. And think of it this way, if you can’t afford to save the matching amount, you can’t afford the treat either.

Calculate purchases by hours worked instead of cost. Take the amount of the item you’re considering purchasing and divide it by your hourly wage. If it’s a $50 pair of shoes and you make $10 an hour, ask yourself if those shoes are really worth five long hours of work.

Unsubscribe. Avoid temptation by unsubscribing from marketing emails to the stores you spend the most money at. By law, each email is required to have an unsubscribe link, usually at the bottom of the email.

Place a savings reminder on your card. Remind yourself to think through every purchase by covering your card with a savings message, such as “Do I really need this?” Write the message on a piece of masking tape or colorful washi tape on your card.

Participate in a local Investment Development Account program. If your income is low, you may be eligible to participate in an IDA program where your savings are matched. In return for attending financial education sessions and planning to save for a home, education, or business, you typically receive at least $1 for every $1 you save, and sometimes much more. That means $25 saved each month could become several hundred dollars by the end of the year.