The How, Why, When, and Where of Saving Money

Digital Only: Young Adults

The How, Why, When, and Where of Saving Money

Article prepared in consultation with E. Jeffrey Hill, PhD, researcher on family finances

Financial Savings

Whether you view money as heaven-sent or just a necessary evil, it definitely is necessary. But as young adults, we often feel like we never have enough for even our day-to-day needs, let alone any unforeseen emergencies! That’s why it’s so important to have savings.

To help you, here are five tips to get started on building your savings early so you can enjoy the blessings of financial stability later.

  • How? Start by creating a budget. Carefully plan how much of your income will go to paying tithing and your needs (bills, food, debts, etc.). Whatever is left over will give you an idea of how much you can save every month and how much remains to spend on your wants.

    Check with your financial institution about options to make savings easier, like automatically putting a certain percentage of your income into your savings account each month. That way, you don’t have to even think about it! And make sure to take advantage of any kind of retirement savings plan your employer might offer.

  • When? Now! … Or at least starting with your next paycheck. You might feel like you don’t have the room in your budget to save right now, but by starting to save even just a little bit each month, you’ll be building a habit that will bless you in the future!

  • How much? Save as much as you can within your budget. If money is tight or you’re in debt, you might want to save just 5 percent each month. But as your income increases, you can increase that to 10 or 15 percent or even more as time goes on. A good goal may be to have at least one month’s emergency supply of money. Then start saving enough to cover 3 to 6 months and keep building.

  • Where? It’s a good idea to put your savings into its own account—that’ll keep you from being tempted to spend it on everyday things. If you are saving for something specific, try setting up a specific account you can name (like “couch” or “laptop”) to remind yourself of your goal.

If you still have questions, meet with a financial advisor. They can help you make savings goals based on your financial situation.

Above all, remember that the first step to financial security is to pay your tithing first! Trust in the Lord’s promise that He will “open the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it” (Malachi 3:10; 3 Nephi 24:10). Sometimes we expect those blessings to come in the form of money raining down on us, but keep in mind that these blessings can include spiritual ones (see David A. Bednar, “The Windows of Heaven,” Ensign, Nov. 2013, 17–20).

The Lord said that “it is [His] purpose to provide for [His] saints” (Doctrine and Covenants 104:15). Saving money can seem hard—especially as a young adult, when so many aspects of your life might not be stable—but little by little, you can do it. Heavenly Father will help you change your habits and priorities to become self-reliant and financially secure.