| How to Save Your Money, Part 2 |
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Start small. Like starving yourself to lose weight, saving tons of money all at once can be painful. Instead, start by saving between $5 and $50 from every paycheck. You can always raise the amount as time goes on. Increase your savings little by little with every paycheck. If you decide to save $5 every pay period, try to increase that amount by $5 with each succeeding one. If starting with $50 feels comfortable to you, try increasing your savings by $25 or $50 with each pay period that follows. Congratulate yourself when you "hit the wall." When you have increased your savings to a point that it feels like a strain, know that you haven't failed. Rather, "hitting the wall" shows how much you succeeded in the previous month. Chances are you've saved far more than ever before. Scale back your monthly saving to the last sustainable level, and make sure to continue building your savings account with every future paycheck. Put your savings where you can get it, but where you won't see it. When you take cash out of your wallet, put it in an envelope in a place where you don't usually look for money, like a kitchen cupboard or a medicine cabinet. If you put your savings in the bank, make sure it's in an account you don't normally use to pay your bills. You may want to open a new account strictly for savings. Use direct deposit to make your savings automatic. If your employer pays you by direct deposit, you can probably split the money between two or more bank accounts. In that case, direct a specific amount into a savings account, not into your regular checking account. This way, you'll automatically save money for yourself. Set up a holding account for bills paid less often than once a month. Instead of agonizing about how to pay that $600 insurance bill every six months, many advisors suggest you put $100 a month into a separate bank account. Saving for a large expense is less stressful than scrounging to pay that sum all at once. If you put away a portion of the required amount every month, you'll have the money when the bill comesand you might have even earned a little interest on your savings. |
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