PITTSBURGH (KDKA) – Saving money is one of those things we all know we should be doing, but it often gets pushed to the bottom of the priority list.
For young families, this is especially important, but often difficult to see in the struggle to make ends meet.
Don’t underestimate the impact of having money set aside.
“It can put your mind at ease when the next bad thing happens,” said CBS senior business analyst Jill Schlesinger.
Schlesinger says many people live paycheck to paycheck and don’t see the way to savings.
“The easiest thing to do is take a dollar amount each month and put it into your savings, and it can be a very small amount, it can be $10 a week,” Schlesinger said.
This amount t can be increased according to your possibilities. Schlesinger says the key is to automate the transaction, so you’re not actually involved.
“So what we know from behavioral finance is that when you automate things, it goes a lot better,” Schlesinger said.
A word of advice though: don’t put your money just anywhere.
Watch: KDKA’s John Shumway reports:
“If you need access to cash and an emergency reserve, that means you have to have access to it and there can’t be any risks,” Schlesinger said.
“I really strongly recommend people have 6 to 12 months of living expenses somewhere safe — a bank, a CD, some short-term instrument that you can get in and out of quickly,” Schlesinger said.
Before the pandemic, the recommended reserve amount was sufficient for 3-6 months, but in recent years and employment vulnerability to COVID-19 has increased this need to 6-12 months.
If you’re trying to figure out how much money you could afford to save each month, Schlesinger suggests starting by tracking all expenses for 90 days.
She then suggests doing a self-assessment to help track expenses.