Saving habits
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Saving is a habit that’s built over time; it doesn’t happen overnight. Many financial experts suggest that you save a specific percentage of your income out of each paycheck. Make that your goal, but remember that any amount you set aside helps you build the habit of saving. Here are a few techniques to help you focus on saving more:
Pay yourself first.
Make savings the first bill you pay each month. This makes it a fixed expense and it’ll become a permanent part of your budget.
Make it automatic.
Set up an automatic transfer from your checking account to your savings account. If you never see the money in your account, you won’t be tempted to spend it.
Adjust your income withholdings.
If you’re getting a tax return each April, you’re basically giving the government an interest-free loan. Consider adjusting your W-4 to put more money in your pocket and in your savings account each month. If you generally have to pay when you file your taxes, adjust your withholding to take more money out each month so you don’t have to worry about that yearly expense.
Cut corners.
Revisit your budget to find ways to save enough each month to set aside in a savings account. Eat out less, make coffee at home, cancel cable or reduce your shopping. Cut carefully, though! Remember, no budget works without a little room for fun.
Put away windfall money.
Tax returns, birthday money and unexpected refunds may seem like your ticket to a new outfit, a dream vacation or that huge flat-panel TV, but, if you make saving a priority, you’ll have more flexibility down the road.
Set goals.
Saving money for the sake of general financial health is great, but saving money for something special gives you added motivation. Make a list of your financial goals--no matter how big or how small--and keep that visible to help you build your saving habits. Sit down with your family to set goals together. Use this goal poster example to help you make your own to hang in a visible area of your home.
Visit our Budgeting module to learn more about setting goals as a family.
