Key ideas

1. Get a head start with one-time money. Sell things you don't use, or save part of a tax refund or bonus. It shortens the whole timeline.
2. Automate a transfer the day after payday. A fixed amount you never see in checking is easier to keep than one you decide on each month.
3. Divide what's left by your monthly amount. $1,000 minus your head start, divided by what you save each month, gives your finish line in months.

Vocabulary

Emergency fund

Cash set aside only for surprises like a job loss, a car repair or a medical bill. A common goal is 3 to 6 months of essential costs.

Credit union

A not-for-profit financial cooperative owned by its members, offering checking, savings and loans much like a bank.

Split direct deposit

A payroll setting that sends part of each paycheck to one account, such as savings, and the rest to another.

Work it out

Jae, 24, has no savings and lives paycheck to paycheck. He sells an old gaming console and a bike, and finds $125 a month he can move to savings.

1. Goal
2. Head start from selling things
3. Still to save
4. Payday transfers
5. Canceled subscriptions
6. Saved per month
7. Months to reach $1,000

Check yourself

1. You have $200 saved and can add $100 a month. How long until you reach $1,000?

   • A. 10 months
   • B. 6 months
   • C. 12 months
   • D. 8 months

2. What is the main job of your first $1,000?

   • A. To invest in the stock market
   • B. To cover small surprises without a credit card
   • C. To pay for a vacation
   • D. To replace your income for 6 months

3. Which move speeds up your first $1,000 the most in one step?

   • A. Putting part of a tax refund into savings
   • B. Checking your balance more often
   • C. Moving savings into checking
   • D. Waiting for a raise before starting

Your turn

Open a savings account at a separate bank or credit union and name it "First $1,000". Schedule a recurring transfer for the day after your next payday, even $25, and list three things you could sell this week.