How to Save Money!

We all say we are going to do it! Save a little bit of money here and there for a new top, or for a new car, or college! As we work we realize that it is harder and harder to save with prices rising everywhere!

Instructions

Difficulty: Challenging

Things You’ll Need:

• Goals
• Patience
• Good record keeping system

1. Establish a Time frame! If you want to be able to purchase a house in the next 3 years, set a date for that goal. Make sure that the alloted time is adequate for what you are saving for. If it’s not attainable, you’ll just get discouraged.
2. How much?? Figure out how much you’ll have to save per week, per month, or per paycheck to reach your savings goals. Take each thing you want to save for and figure out how much you need to start saving now. Keeping the house example, if you want (or need) to put a $20,000 down payment on a home in 3 years, you’ll need to save about $550 per month every month. For some, this is not a reachable goal! If your paychecks amount to $1000 in total for the month, it might not be a realistic goal, so adjust your timeframe until you come up with an amount that you could live with and get by with.
3. Keep a record of your expenses! Take a look at your expenses. Write down everything that you spend your money on for one month. Be as detailed as possible, and try not to leave out small purchases. Assign each purchase or expenditure a category such as: Rent, Car insurance, Car payments, Phone Bill, Cable Bill, Utilities, Gas, Food, Entertainment, etc. This will give you an idea of where you can cut back and be able to throw it into the savings account. When you see that you spent over $200 eating out, or going to the movies, etc, you can cut some of that down and put it into the savings.
4. Take a REAL look. Subtract your expenses (the ones you can't live without) from your take-home income (i.e. after taxes have been taken out). What is the difference? Does it match up with your savings goals? If there’s absolutely no way you can fit all your savings goals into your budget, take a look at what you’re saving for and cut the less important things or adjust the timeframe.
5. Credit Cards...Stop using them! This is the hardest thing to stop. Try to pay for everything with cash. Don't even use checks, its easier to lose track using checks, especially if keeping good records is not your forte! With cash, you can see when you are running low and keep your mind set on the savings!
6. Open an interest-bearing savings account. Keep track of your savings by keeping it separate from your checking account! Usually, the interest is better in a savings account (if you get interest on your checking account at all).
7. Get Paid First! Your savings should be your priority, so don’t just say that you’ll save whatever is left over at the end of the month. Deposit your savings into an account as soon as you get paid. Out of sight, out of mind!
8. Know where your money is. If you accidentally overdraw your bank account, you will incur some ugly bank fees, and/or the place you paid with that check may also hit you with a bounced check fee on top of that, and send the check in again, resulting in a second overdraft fee from the bank! Always know how much money you have in your account!

Tips & Warnings

• Credit cards are not always evil. It's all about self control. If you use them responsibly (i.e. completely pay them off every month), you can benefit from them, as some cards offer cash back on the purchases you make.
• You can set up an automatic transfer from your checking account to your savings account.
• Many employers allow you to deduct savings from your paycheck. The money is directly deposited in your savings account so you never even see it on your paycheck.
• Do not go out "window shopping" with any money on you. Only shop with a predetermined shopping list.
• Be sure to keep track of automatic deductions from your paycheck and any automatic transfers you set up. Sometimes mistakes happen, and if you’re not paying attention, you might not get all your money.