Saving money requires discipline—and motivation. Need a place to start? Consider setting a budget. Budgets focus on what you spend; but taking a closer look at your spending can be a great way to jumpstart your savings. Try finding ways to “cut the fat” in your budget, and divert the money that you would have spent into an interest-bearing savings or money market account.
Create your budget by following three simple steps:
- Identify how much you are currently spending. Try writing down your expenditures for 30 days to discover your actual spending habits.
- Define your long-term financial objectives and set goals. This will help you to keep the big picture in mind, and motivate you to set money aside for your goals.
- Track your progress. Compare your budgeted spending to actual spending. Adjust your budget to reflect real-life needs, and long-term goals.
When planning your budget:
- Don’t factor your budget on a guess. – Avoid factoring year-end bonuses, tax refunds, or investment gains.
- Plan for the unexpected. – Factor a percentage of your income to be budgeted for an emergency need.
- Set your limits—Aim to put at least 10% of your income into a savings account