8 Tips For Saving Money

savings plan
This savings plan is floating around the Internet. I like it because it showed how incremental savings can add up.
When my son was born in 2012, I started saving $300 a month for his college fund, adding it to a small savings account we had previously used for travel. The money didn’t seem like much, but it was better than nothing. And I figured we could increase the amount later on. After all, he’s just a baby.
Today, my son isn’t even 2 years old and he already has enough for his first semester of college.
I’m shocked how quickly that $300 a month added up. If we keep this up, he should have plenty of money for college when he graduates. And since I save the money as soon as we get paid, we never feel the $300 going out.
For most of us, it doesn’t work is to be too ambitious with savings goals. Last year, my resolution was to save 40% of our income every month. Of course we didn’t get anywhere close to that number. It was too big of a goal.
So this year, I’m dialing it back. My plan is to save a regular, doable amount every month. I would still like to save 40%, but I need to work up to that number. Slow and steady wins the race sometimes.

8 Tips For Saving Money

Pick A Small Amount To Save Every Month. A good rule of thumb is 10% of your income. If that’s too much, pick a regular amount–$300 a month is better than nothing. Heck, $50 is better than nothing. The trick is to save that amount, no matter what.
Pay Yourself First. It really does work to take the savings off the top of your paycheck before you deal with anything else. You won’t miss the money if you don’t know it’s there. You can even set up an account to automatically save the money for you.

Don’t Touch Your Savings Account.
This should go without sayings but: unless it’s an emergency, like you’re going to lose your house if you don’t, make it a rule to never take money out of savings.
Put Extra Paychecks Directly Into Savings. Whenever we end up with extra money, like a big tax return or freelance work, it goes into savings and not the checking account. This is a great way to beef up the savings account without even noticing it.
Cut Your Bills And Put Extra Into Savings. Say you call your cable company and decide to go from $150/month satellite service to a pared down $60/month cable plan. That extra $85 now goes into savings every month. Do this with all your bills and see how big the number can get.
Sell Extra Stuff. Put that stuff cluttering your house on Craigslist, Ebay, or Amazon, or hold a yard sale. Put the money into savings.
Track Your Spending. Keep a price book for a month or two and track all your spending. Look for places you can cut back. Do so. Save!
Don’t Beat Yourself Up. I’m not crying in my soup over not making my 40%-of-income goal. I simply adjusted my expectations and moved on. The point is to keep trying. It all adds up in the end.
Want more?

Here’s to a much bigger savings account at the end of 2014!

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