At Catholic Charities Budget Counseling, we teach two kinds of savings. The first kind of savings are what we call “Put & Take Savings”. These are savings that you deposit and withdraw money from on a regular basis.

Consider the little things that come up throughout the year—scheduled things like quarterly car insurance payments, or the not-so-pleasant surprise of a flat tire. Once you’ve identified those items, determine how much you spend a year on them. Old credit card statements and checkbook registers will help.

Then figure out what you need to save each month to cover those items. Simply take the yearly amount and divide by twelve. Ideally, you earn enough to meet this monthly figure. If not, don’t panic. If you save as much as you can, you’ll at least develop a discipline for saving.

This savings is the key to staying out of debt. You may always have just enough to cover your living expenses and bills, but if you don’t save and that car tire goes flat, you’ll have to create debt to pay for the repairs. The key to getting out of debt is to pay regularly on your debt and not create any new debt. Put & Take Savings enable you to do just that.

The second kind of savings are “Put & Leave Savings”. You would use them only for something big, like a down-payment on a car or a child’s wedding. These savings can also help you in a big emergency such as a job loss or health problem.

Experts have differing opinions when it comes to how much should be “put and left”. Six months of income was the standard many years ago, but now some experts say three months or even eight months.
While many feel that saving money isn’t realistic, I encourage you to make savings a game. Challenge yourself and your family to see where you can reduce costs and start saving. Start simply—save your change in a family piggy bank! And remember—savings are freedom. I hope that each of you may start experiencing that freedom now!