Many people want to save money, but don’t know where to begin. The key to saving is to put away a little bit of money at a time.
Money expert Clark Howard says you can do that by having a financial goal in mind — a specific amount you want to save each month or year.
This Simple Math Equation Can Help You Save $1,000 a Year
We’re going to show you a really easy way to make that happen. And the good thing is that you shouldn’t have to dramatically change your lifestyle.
If you want to save $1,000 in a year, all you have to do is follow this simple math equation:
$1,000/Number of paychecks in one year = How much you need to save each paycheck.
Here’s our real-world example: If we make the assumption that you get paid every other week, that’s 26 paychecks in a year. So $1,000/26 = $38.46.
That means that you only need to save about $39 every paycheck to build up a $1,000 emergency fund in a year! Here’s how it works for other common pay periods:
|Save From Weekly Paycheck||Save From Bi-Weekly Paycheck||Save From Monthly Paycheck|
If you find that saving $39 per paycheck is a financial strain, check out these tips to reduce monthly expenses!
Also, in your journey to save, resist the urge to compare yourself to others. That’s the most self-defeating way to get thrown off track! Instead, set a realistic goal that you can handle without overextending yourself financially.