How to Save: Strategies for Saving Money Each Month
The Traditional Methods
There are many tried and true ways:
- Every day put all of your loose change into a jar. Every once in a while deposit the money in your savings account. In time the money will grow into a little nest egg.
- Try to set aside a certain amount of money each month or each paycheque for your savings. People have been doing this for years, but it takes discipline.
A Newer Method:
Pay Yourself First
One of the best saving strategies is to pay yourself first. What this means is that you designate a certain amount of your paycheque as your pay and you pay that money to yourself before you pay your bills or anyone else.
If you pay yourself first, then money will get saved because paying yourself is now your first priority. The nice thing about this method is if your budget is a little tight, it forces you to make adjustments elsewhere and your savings continue to grow.
Paying yourself first also makes sense. Why are you going to work everyday anyway? To earn money for someone else? No way. You go to work to earn money for you and your family. That’s why you should pay yourself first—to make sure that your first priority is taken care of: you. It is not likely that anyone else is going to take care of you because they assume that you are taking care of yourself.
You can put money aside on a regular basis for a down payment for a house, a car, or for your retirement. To get started, all of this money can go into one account, and it can double as your emergency fund as long as you don’t have “emergencies” on a regular basis.
The Smartest Method to Save Money: Have a Spending Plan
The very best method to saving money is to create a Spending Plan or a Budget. With a budget you figure out what your income is and what your expenses are. Once you know these two things, you can look for ways to reduce your expenses or increase your income to allocate an amount of money that you can afford to save. This is how the world’s largest corporations do it and this is how most of the world’s successful business people do it. This method takes a little bit of work at the beginning and a check-up every year or two, but it works.
*Places to Save Your Money – Where You Can Save Your Money.
Under Your Mattress
We hope that you don’t do this. Every thief knows that this is the first place to look.
Use One Savings Account
- An emergency savings account
- At least one savings account for major purchases
- A retirement savings account
If this is too much for you, get started by simply putting your money into one savings account, and then grow your savings from there.
High Interest Savings Accounts
These types of savings accounts are usually more restrictive than regular savings accounts, but they pay a lot more interest. Make sure that your bank or credit union is paying you a competitive rate and then save away. These types of accounts are usually safe, convenient and their interest rates usually move up as bank interest rates move up.
If you know that you are not going to need your savings for a year or more, consider putting your savings into a Term Deposits. These are a great way to try to get more interest on your money than a High Interest Savings Account can offer.