Saving money requires having a strategy and following it

June 06, 1997

Most, if not all, individuals and families have some financial goals. However, setting aside enough money for savings and investments to accomplish these goals can be difficult.

Making a firm commitment to saving and investing probably is the most important step to making your financial goals a reality. The next step is to begin finding ways to set aside the money needed to achieve these goals. If you continue spending the same way you have been, your results at the end of each pay period will be the same. The challenge becomes, what changes can you make in your daily spending choices that will result in less cash out, while retaining a satisfying quality of life?

Have you thought that saving anything out of your paycheck is next to impossible? Many people are surprised at how quickly they can begin to save after changing just one or two spending habits. Try one or more of these relatively painless strategies for putting money in the bank.

  • Pay yourself first. Treat savings like one of your regular bills. Put a part of each paycheck (even if it is a small amount) into savings and leave it there. Many employers have direct deposit with local financial institutions making it very easy to do.

    When you finish paying off a loan, continue making the same monthly payment to yourself, not for additional spending, but for savings or investments.

  • Collect coins. Put all loose change into a jar. When it's full, deposit the money into a savings account.
  • Bank your refunds. When you get a refund from a supermarket product or other source, save it.
  • Break costly habits. Do you really need to buy lunch out every day? Are you trying to stop smoking? Save the money you normally would spend on habits like these.
  • Increase investment yields. Don't settle for low interest rates. Earn more money on your money by seeking investments - consistent with your risk tolerance level - which pay a higher return. Avoid products with high fees or service charges. Start saving early to maximize compounding interest.

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