Want To Save More Without Thinking About It? A CFP’s 6-Step System
Are you tired of struggling to save money? Do you wish there was a way to make saving easier and more automatic? You're not alone. Many people struggle with saving, but a Certified Financial Planner (CFP) has developed a 6-step system that can help you save more without thinking about it.
Step 1: Automate Your Savings
The first step in the CFP's system is to automate your savings. This means setting up automatic transfers from your checking account to your savings or investment accounts. By doing this, you'll ensure that you're saving a fixed amount of money regularly, without having to think about it.
TogetherBudget can help you set up automated transfers and track your savings progress. With TogetherBudget, you can link all your accounts in one place and create customized budgets that work for you.
Step 2: Start Small
The second step is to start small. Don't try to save a large amount of money right from the beginning. Instead, start with a manageable amount that you can afford to save each month. As your income increases or expenses decrease, you can gradually increase the amount you're saving.
Step 3: Make Savings a Priority
The third step is to make savings a priority. This means treating your savings account as a non-negotiable expense, just like your rent or mortgage payment. By doing this, you'll ensure that you're always making progress towards your financial goals.
Step 4: Take Advantage of Employer Matching
The fourth step is to take advantage of employer matching on retirement accounts such as 401(k) or IRA. If your employer offers a matching program, contribute enough to maximize the match. This is essentially free money that can add up over time.
Step 5: Use the 50/30/20 Rule
The fifth step is to use the 50/30/20 rule as a guideline for allocating your income. Allocate 50% of your income towards necessary expenses such as rent, utilities, and groceries. Use 30% for discretionary spending such as entertainment and hobbies. And, allocate 20% towards saving and debt repayment.
Step 6: Review and Adjust
The final step is to regularly review and adjust your savings plan. As your financial situation changes, you may need to make adjustments to your savings rate or investment strategy. By reviewing your progress regularly, you'll ensure that you're on track to meet your long-term financial goals.
In conclusion, saving money without thinking about it requires a structured approach. By following the 6-step system outlined above and using tools like TogetherBudget, you can make saving easier and more automatic. Remember, small changes today can add up to big differences in the future.
By Malik Abualzait
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