Saving Money

A lot of people say they want to save more money, but they don't know how! Here's a few tips and tricks for those whose money burns holes in their collective pockets!

Set some goals. Or a goal. The thing is, you should have something in mind to save for before you start saving. This can be a short term as a new video game, or as long term as retirement. Without a goal to work towards, you're just enigmatically saving money for "something important." Before you know it, you'll start justifying everything as being "something important," and your savings will evaporate. Once you've got a goal, figure out how much you're going to save out of your paycheck every week/biweek/month in order to meet your goal in your preferred timeframe.

Also remember that interest matters, as does inflation. If you save your money in a jar under your bed, you're actually losing money due to inflation. If you put it in an interest-bearing savings account, you lose a lot less money, although inflation can still take a chunk out of your savings. Also, keeping money in a savings account, separate from your checking account, helps to keep you from touching it, or at least spending it frivolously. An exception to a "money under the bed" rule, however, is a loose change jar. If you throw the change in your pocket in a jar every day you'd be surprised how quickly that jar can fill up. Also, the fact that you need to roll those coins up, or take them to a coin processing machine to actually get paper money for it makes you a lot less reluctant to dip into the jar when you're feeling greedy.

In regards to credit cards and loaning money to people, in both cases it's safe to follow the rule of "don't lend/spend what you can't afford to lose." We all want our friends to be trustworthy and pay us back, but loaning out more than YOU can afford harms both your friend and yourself. As far as credit cards go, if you can't resist the urge to spend more than you can afford, cut it up and get a debit card instead. Then you won't be hit with nasty bills out of nowhere and a ruined credit rating.

Remember to always pay yourself first. Work out a budget based upon your goals, figure out a percentage to save out of each paycheck, and stick to that religiously. Also make sure it's reasonable though. A vacation in the bahamas is no good if you live miserably before and afterwards. Live within your means and set realistic goals. As your life goes on and you(hopefully) make more and more money, you'll be able to set higher and higher goals.

The majority of america is living paycheck to paycheck. A very respectable first saving goal is to amass six months worth of pay. Most experts agree this is a good, safe percentage to cover for loss of work due to injury, pay cuts, layoffs or natural disasters. Once you have this saved up you can stop worrying so much about a safety net and worry more about the luxuries you've been dreaming of, like that week at the spa, or the cruise to alaska.

If you're looking to save for longer-term goals, look into other investing options like CDs(the kind you get at a bank, not a music store), moneymarket accounts, or an IRA. Talk to your banker about these options(you DO have a banker by now, right?).

If all else fails, you should try to put away ten percent of every paycheck you get, that you absolutely do not touch except in dire emergency. Dire emergency is anything involving loss of life or home. If(heaven forbid) something DOES happen, you should have enough to cover your expenses. If nothing happens, you'll have a nice fat nest egg to sit on when you're looking to retire.

For more in-depth advice we recommend going down to your local library and checking out a copy of "Personal Finance for Dummies." We hope we've provided you with a good starting point for getting on the road to responsible saving.

Until next time!

Team Ben