How to Plan and Increase Your Savings

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By agille
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Plan and Increase Your Savings

Save money. That's the best advice anyone can give these days. But how do you go about saving money easily? Well its really not that hard, if you pay attention to where your dollars go

Difficulty: Moderate

Instructions

Things You'll Need:

Discipline
A bank account

Step 1

The first step to save money is to get some. I recommend a job. I have a job and they give me money when I do good work. Its a nice relationship. Seriously, once you have an established income you need to determine what you base expenses are. This will allow you to determine how much money you can or should be able to save. You need to consider rent, groceries and utilities. Everything else is questionable.
Step 2

Once you have the basics, write down everything else you spend money on. Entertainment, cell phone with extra text messaging package, excess clothing, whatever it is you need to determine how much money you are spending that you don't need to. Now establish a savings target; for example three to six months pay in cash reserves.
Step 3

With your savings target in mind, start reviewing your expenses with the thought "How much is this expense hurting me in achieving my goals?" If you feel that you really need the new CD fine, just realize what you are doing and that you may be sabotaging yourself.
Step 4

If your employer offers a 401k plan contribute, strive for at least 10% of your salary; if that seems like too much, start at a lower number and gradually raise the amount you contribute until you reach 10%. If you can, keep going until you have reached 15%. Every time you get extra income (tax return, raise, lottery winnings, whatever) split the pot with yourself; contribute at least 60% of the extra into your savings and enjoy the rest with some reasonable restraint. If you diligently follow this or a similar strategy you should be able to develop a healthy savings account in a reasonable amount of time.

Comments

Juwaren said

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on 12/4/2008 Great advice. Very helpful. Thanks

on 11/18/2008 Be careful, money is printed today like on your toilet role picture (I like it also). If you can build a nest at all, make it stable. You have only four weeks a chance to it, after that it might be gone forever. I think you wanted to hear me and wrote therefore your article. I write for others too. Have a good Thanksgiving.