Ten Things To Know About Saving Money

You know you need to save money. Saving seems simple, but you can make your money work harder for you when you put it in a savings account.

Maybe you have a nice nest egg put aside already. Maybe you're just getting started with savings accounts. Either way, here are ten hot tips to help you get the most out of your savings:

1. Start yesterday: Compound interest really is magic. The sooner you start saving, the more your savings will be worth when you go to use them. Money earning interest in a high-interest savings account is working for you. Even if savings account rates are lower than returns you can receive with higher-risk investment vehicles, even the small amount of interest you bring in will grow your savings steadily over time. As you earn interest on the interest, those tiny payments start to add up. 
2. Choose the right savings account: Not all savings accounts are created equal. The savings accounts your local bank offers as add-ons when you open your checking account probably aren't the best savings accounts. If you compare the best savings accounts online, you are likely to find a better savings account rate and some nice features (such as the ability to create targeted sub-accounts to save toward specific goals).
3. Pay yourself first: You'll never get ahead if you put your own savings last. Once you choose a savings account, start putting a little money in it every time you get paid. Do this before paying any bills, buying any groceries, or spending anything. Make building your savings automatic. If you have direct deposit, have your savings deposited directly to your savings account. If you don't have direct deposit, make a scheduled deposit into your savings account the first thing you do each time you get paid.
4. Save your savings: A penny saved is only truly saved if you don't spend it. When you cut back on an expense or save at the grocery store with a coupon, put that unspent money straight into your savings account - even spare change helps. You'll gradually discover you can live on less than you thought, and your long-term goals will seem more in reach.
5. Use a budget: One very simple budget rule--developed by the authors of All Your Worth--is to save 20% of every dollar you make, put 50% towards your needs, and leave the remaining 30% for your wants. You may need a more detailed budget to keep your spending in line. Most of us do. But at the very least, save 20% of your income. If you can't do that now, save what you can. Gradually decrease your spending and/or increase your income until you reach that goal.
6. Shoot for a goal: We all know saving is a good thing to do. We also know that eating right, getting enough sleep, and exercising daily are good things. While we're at it, we should keep our homes clean and our paperwork in order. Few of us do the right thing every time. To succeed at saving, you need more than just a savings account and good intentions. You need a goal: a specific dollar amount by a specific date. Otherwise, it's all too easy to think you're doing your best when you aren't really pushing your limits.
7. Be prepared for setbacks: Even the very best savings plans will hit potholes sometimes. Have a dedicated emergency fund you can tap into when unexpected and unavoidable expenses occur, as they will from time to time.
8. Take it to the next level: At a certain point, you'll need more than a savings account. Once your emergency fund is fully funded in your high-interest savings account, learn more about tax-sheltered accounts that help you save for retirement and college educations.
9. Find your personal point of "enough": It is possible to save too much. The joys of saving should never eclipse the joys of living. You'll be happiest and most fulfilled when you find the personal balance point between saving enough to reach your goals for the future and spending enough to have fun in the moment.
10. Just do it: Don't let any of these tips become an excuse not to save. Can't find the best savings accounts? Nowhere near being able to put 20% of what you earn into savings? Unsure what your goals are? Fine. Work on all that later. For today, just start saving. Doing it imperfectly is worlds better than not doing it at all.

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