Start Small, Save Big: How Every Dollar Counts

Building savings is one of the most important financial habits that you can develop. Unfortunately, this is something that many people tend not to do. One of the main reasons is that some people prefer to live in the now rather than to put aside their money for an uncertain future. There are also some people who feel that their income is too small to put aside any funds for savings. The truth is that whether you’re saving for an emergency fund, retirement, or a major purchase, having savings offers financial security and peace of mind.

If saving a large amount feels overwhelming, start small. You can do this by setting aside a small percentage of your income every month. Once this becomes a habit, it gets easier to continue to save over time. For those who may become distracted from this goal or find it hard to develop that kind of discipline, you can consider having a portion of your salary automatically transferred into a savings account to make saving easier. Over time, even small contributions will add up.

An emergency fund is a specific type of saving goal that is generally recommended by financial experts. This fund should be separate from your everyday spending money and saved for unexpected events like medical emergencies, car repairs, or losing your job. It is suggested that your emergency fund should cover at least 3-6 months' worth of living expenses. Having this cushion ensures that you won’t become overwhelmed with debt if an emergency or unexpected financial challenge arises.

In addition to the emergency fund, consider saving for specific goals, like vacations, school expenses, or retirement. Open different savings accounts for each goal to keep things organized. If your employer offers a retirement plan, make sure to take advantage of it. These plans often offer tax benefits and will be a benefit to you in your old age.

Ultimately, building savings requires patience and discipline, but it’s one of the best things you can do to protect your financial future and provide a buffer for the unexpected. Starting early gives you the time and flexibility to weather any financial storm and achieve your long-term goals.

Written by Gayle Marshall, Director - Strategic Projects