3 Ways to Build your Cash Reserves

photo courtesy of FindBliss.com

Find Bliss Magazine (one of our favorite lifestyle publications) recently published this timely article with 3 important tips to rebuilding your financial reserves.

If getting in good financial standing is on your to-do list in 2010, you’re not alone. Millions of Americans are looking to save more in the wake of the financial crisis. See how you can get started.

1) Get Real
Often the hardest thing about delving into your finances is actually getting started. It’s daunting to take a long hard look at what you have and what you don’t. But, if you’re going to start saving, you need to get real. And that entails pulling your head out of the sand.

Consider using an online tool such as Mint.com, as it’s a great resource for putting your financial status in perspective with easy-to-read pie charts and graphs. Once you’re a member (it’s free!) you’ll be able to track your bills, spending and saving patterns.

2) Assess your Needs and Wants
Once your finances are organized, you can really assess where your money is going. Eliminate frivolous spending where you can. For example, if you discover that you spend $75.00 a week on lunch, resolve to cut that number in half by bringing your lunch a couple of times a week.

Another place to look is at your bills. Many people don’t realize they can lower their bills with a quick phone call. Contact your cable company, car insurer or Internet provider and see if they’re offering any specials. Saving $20 a month on just one bill nets you $240 a year!

3) Make Saving Automatic
The best way to save is to do it automatically, since it takes the pressure off of you to watch every cent that comes into and out of your hands. First, find out if your employer offers a retirement plan such as a 401K. If they match your savings up to a certain percentage, (usually 7%-9%), sign up to save the maximum. Not doing so is like throwing free money away!

Next, look into opening a high yield savings account. Create a savings plan where you allocate money from your checking account into this savings account every month. A good strategy is to have the account deduct money on payday, when your checking account has some padding.

With a high-yield savings account, you’re on your way to creating a healthy emergency fund. Once you’ve saved enough to cover four months of living expenses, think about investing your money elsewhere, such as in money market accounts, bonds, or a Roth IRA.

Click here to find other great articles on Find Bliss Magazine

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