Establish Good Saving Habits

When it comes to recognizing the fundamental importance of saving money, Americans always rank at or near the bottom of the list. Even people who acknowledge the value of saving often come up short with follow-through. The principles and practices presented here can help you establish the savings “habit” that no solid financial foundation can do without:

• Pay yourself first. If you wait to see what's left over, you are less likely to find anything left to save. Determine in advance how much money you plan to put in savings each month. If your income rises, increase the amount of money deposited into your savings account.
• Let technology make saving easier. Consider automatic payroll deductions or scheduled transfers from checking to savings. Whatever the method, arrange to have a specific amount transferred to your savings account every pay period.
• Pay your bills on time and pay more than the minimum amount. Late fees and interest represent a 100% loss of funds that could have helped build your savings.
• Be honest with yourself about what you need versus what you want. Do you need to eat out every day for lunch? Do you need that gourmet cup of coffee in the morning? By bringing your lunch to work a couple days a week, you can save hundreds of dollars a year.
• Shop around. There are thousands of options for financial services products. Be selective, and get the best prices, services, convenient locations, and lowest fees for credit cards, bank accounts, mortgages and CDs. Money paid in fees or spent working inefficiently is money robbed from your nest egg.
• Consider how certain investments may help. For long-term goals, such as saving for a home or retirement, look into government bonds, US Savings Bonds, certificates or deposit, and other safe ways to earn more on your money.
• Consult your local bank. Ask which package of bank products and services would best suit your needs. You may be surprised at how innovative some banks are when it comes to helping customers save.

To get a snapshot of your savings IQ, or just to keep yourself on-track, make sure you can answer the statements below with a confident “yes”! 

• I set goals and make plans to save for large purchases.
• I have a budget that I adhere to.
• I save a fixed percentage of my salary every pay period and I have automatic payroll deductions from my paycheck to a savings or retirement account.
• I increase my savings as income increases.
• I pay off my credit card balances each month, or at least make well above the minimum payment.
• I keep track of how I spend cash withdrawn from the ATM.
• I reconcile all of my monthly account statements.
• I have an account set up to save for my children's college education.

I teach my children about the value of money and how to manage it.