When I really started taking money seriously, I started making good money decisions. The good money decisions are all about building your foundation of wealth. If you just make good money decisions you will be better off than a vast majority of people.

Today, we will talk about one of the decisions called SAVINGS. So what is savings? – Saving is income not spent, or deferred consumption. The accumulation of it is called Savings.

Knowing how to save money is the foundation for financial success. It is the root of what separates the rich from the poor. For most people saving money is not easy. Clearly, it is much more natural to spend money than save it. Since saving is not natural, it is something we must learn to do and work at. Saving money over a lifetime requires conscious effort and continued awareness so that it becomes a habit.

Living without a savings is tantamount to a skydiver skydiving without a parachute – Did I hear some say suicide mission?!. With budgets already tight, many people wonder where they can find the money to save and struggle with the how to save. To solve the dilemma, I would like to suggests the following money-saving tips:


Track your expenses.

 To find money available for savings, first determine where you are currently spending your money. You can’t know where you’re going until you know where you are. Tracking expenses will provide the answers. Write down every money you spend. At the end of the month, take a look at where your hard-earned cash really goes. You just might be surprised.

savings culture

Create a budget.

 A well-designed spending plan considers all sources of income, living expenses, debt obligations and savings. Be sure to incorporate all three expense categories: fixed expenses (e.g., mortgage, auto loans and rent), variable expenses (e.g. groceries, entertainment and clothes) and periodic expenses (e.g., property taxes, home repair, and car maintenance). Whether it’s saving for retirement, education or a vacation, the old adage remains true: pay yourself first. You can’t spend money you don’t have, so set aside your allotted savings right off the top.

Customize your budget to fit your lifestyle.

 When constructing your budget, be realistic when looking for opportunities to save money. People are more successful when they cut back, as opposed to cutting out. Don’t be too strict, or you won’t stick with your plan. Know, however, that small changes over time can indeed add up. Savings opportunities are available in all spending category of your life.

Involve the entire family. A joint effort yields a greater result

And, make it fun. See who can save the most each month, and have a special prize for them. Agree upon a savings goal that everyone can work toward (summer vacation, new car, etc.). Celebrate each success along the way. Before you know it, saving will be as much fun as spending.

Find the right savings vehicle(s) for you.

 There are many ways to optimize your savings. Consider splitting money between accounts that are liquid (such as a money market account) versus those intended for more long-term savings (such as certificates of deposit). Explore liquid money market accounts online, as these accounts can offer higher interest rates. Consider using automatic deposit, transfer, payment and withdrawal of money whenever possible to keep money out of your hands and in a safe place. Know that sometimes easy access to saved money is needed for emergencies, so don’t put all of your savings into vehicles where you’d be penalized for withdrawal.

Pretend it never happened. 

When you get a raise, birthday money, bonus or tax refund, quickly put this extra income toward your retirement plan or savings account. The longer the extra money is in your possession the easier it is to spend it. If you were anticipating using this extra money to buy something special, instead consider using the money to pay down credit card debt, give yourself a small treat, and deposit what’s left over into your rainy-day fund.

Before I leave,

Something is better than nothing.

How much should you save? Any financial planner can run some numbers and tell you how much you need to save with the right assumptions. Even if you don’t have a financial planner, you can find many financial calculators on the internet or JUST DO IT YOURSELF. As far as I am concerned, the amount matters less than getting a savings plan started. You’ve got to start the habit. Never let any hurdles get in the way of getting you started.

Remember something is better than nothing and more is better than less.

Category: General