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 A savings plan that works!
Let's be honest: Saving money is tough! And Americans are terrible at it. Here are some tips:
1. Make it specific. Save $1,000 for a down payment on a car. Save $20,000 for a down payment on a home. Save three- to six-months’ income in the event of job loss. Save for a vacation to the Bahamas. All of these are specific reasons to save money. Figure out how much you want to put aside each month and why. When you have a goal, it will be easier to save.
2. Make it emotional. Connect your savings goal with your feelings. Do you love your boss enough to work for him or her forever? Okay, then. When you need to say no to a purchase in order to meet your savings goal, think about how great it will feel to be able to retire.
Does your son want to be a pilot? Don’t talk about just “saving for college.” Talk about how he will feel when he can fly those big planes and explain that putting some of his money into savings will help him get there. When you feel passionate about what you want to do with your savings, you will be motivated to save.
3. Make it automatic. The easiest way to save is to have money automatically withdrawn from your paycheck before it gets to you. Work with your financial institution or your employer to have money automatically go toward savings and retirement. You won't miss the money that you didn’t see.
Recommended books:
The Wealthy Barber: Everyone's Commonsense Guide to Becoming Financially Independent by David Chilton
Recommended web sites:
www.americasaves.org
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