Things You'll Need:
- An open mind
- Commitment!
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Step 1
ACCESS THE MOOLAH: You'll need quick access to what you make and what's going out the door -if you haven't already, sign up for online banking to make sure you can check your balances every day online.
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Step 2
TRACK THE MOOLAH: You'll need to know on what you HAVE to spend, when it's going out and why the rest of the moolah isn't adding up. Use budgeting software or check out an article here on eHow on budgeting. See links for a fast Excel option.
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Step 3
PAY YOURSELF FIRST: You may have heard this one before but it is vital to do this step to build real savings. A quick option is to create an online direct transfer account(e.g. ING etc.) that pulls money out before you use it. Key reco: Pick an amount that you KNOW you spend on something you don't need i.e. $25/mo on starbucks or $50/mo on snacks. Use that as the monthly transfer amount and set it up for DAY ONE of your paycheck i.e. if you are paid on the 30th, have the transfer on the 1st.Put this item as item #1 on your tracking spreadsheet(see eHow article on Quickly Tracking Spending)
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Step 4
TAX SAVINGS: Many people don't take advantage of a huge tax benefit at their employer -401k or an IRA. Typically if you put in $50, they put in the same or much more(often up to 15% of your income in some cases). Ask your employer if they offer this benefit and set it up to auto withdraw from your paycheck BEFORE it hits your bank!
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Step 5
PAY CREDIT CARDS TWICE A MONTH: Credit card interest kills savings since you end up paying more than you needed to. Minimize interest on your account by making 2 payments/month to the same credit card -once before the 15th and one after. Typically pick a $ amount that's twice your min payment. Add both payment items to your tracking spreadsheet.
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Step 6
KILL CREDIT CARDS: You'll only need one for cash and one for emergencies. Rip all the rest up (after keeping a manual secure record of the number, expiration and credit card security code). Check out eHow articles for fast and smart ways to manage credit card payments.
