It's SmartMoney Monday, and we're continuing the topic of savings. Keane Santos, Assistant Main Banking Center Manager, from Bank of Hawaii, is here with tips on how to make saving easier.
Steve: We know that we should all be saving—but why is it so difficult?
Keane: A lot of reasons, Steve. For some, it's just a matter of finding the time to sit down and set a budget. Others may feel overwhelmed with finding the funds to save. Add on things like daycare, care insurance, retirement accounts—and it may feel there's just not enough left over to put aside.
Steve: Which leads me to my next question. How do you save when you just don't have the extra income?
Keane: This isn't a unique problem. Many people feel that way. For some, it's an over spending issue. For others, they really don't have the extra income. But even if that may seem like the case, if all you have is $5, save those $5. This might sounds obvious, but the more you save, the more it accumulates. The good news is that some people are in the position where their income increases as they develop in their jobs.
Steve: And that means even more savings over the long run. So how do you make it easier to save?
• First, be realistic. If you really spend $300 on groceries a month, but only allocate $200, that's only going to cause problems. So create a budget based on your actual spending habits.
• Next, pay yourself first. Build your savings into your budget.
There are a variety of ways to make saving much easier these days.
Steve: Can you give us some examples?
Keane: Ever hear of that expression, "out of sight, out of mind." Well, if you make saving a no-brainer, then the chances are greater that you won't spend it. Some things you might consider are:
• Getting direct deposit—Some people don't realize that you can set up more than one account for direct deposit. And put a certain percentage of your paycheck to go right into your savings.
• Set up an automatic transfer—whether that's $5 or $50. Start small and build up.
• Sweep your account—That means whatever is leftover at the end of the month after you pay bills, transfer that into your saving. It doesn't matter if it's $3.
Steve: What are some other ways you can save?
Keane: It's about making a commitment to spend money on just what is necessary. So take a look at your budget and find areas where you can save. And find a savings buddy. It could be your sibling or an auntie or uncle. But if you find someone else has the same goals, make it a fun challenge.
Steve: All great ideas. Any final tips?
Keane: Sometimes the hardest thing about saving money is just getting started. So don't wait.
Steve: Thanks, Keane. That's great information. Join us next week when we discuss saving for large purchases. For Keane, I'm Steve Uyehara. Thank you for watching SmartMoney Monday.