“Sometimes the hardest thing about saving money is just getting started.”
This Bank of America article provides a step-by-step guide for simple ways to save money–money that can then be used to pursue your financial goals. To learn more, check out the 8 steps below.
- Record your expenses. Ideally, you can account for every penny you spend for the big items like mortgages, credit cards, and even small items like a coffee and snacks.
- Make a budget. Once you know how you spend, you can compare your income to your expenses and make changes, if necessary.
- Plan on saving money. Your budget should contain a savings category. Ideally, savings should account for 10 to 15 percent of your income.
- Choose something to save for. One of the best ways to save money is to set a goal. Possible goals include saving for a vacation, the down payment for a house, retirement, or anything important to you.
- Decide on your priorities. Prioritizing goals can give you a clear idea of what is most important and helps to remind you why you are saving money.
- Pick the right tools. There are many saving options and the choice often depends on the amount of time before you need the money. Often, money for short-term goals is placed in savings accounts. Money for long-term goals may involve stocks, bonds, or mutual funds.
- Make saving automatic. Banks offer automated transfers between checking and savings accounts. Automated transfers are great because you don’t have to make a decision to save or invest; it just happens.
- Watch your savings grow. Checking your progress every month helps you stick to your personal savings plan.
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You may want to use the information in this blog post and the original article to
- Discuss the relationship between income, expenses, and establishing a systematic savings program.
- Help students understand how saving small amounts over time can help obtain goals that can change their lives.
- At the end of the month, many people wonder where their money went! Why is it important to determine how you spend your money?
- How can a budget help you find the money needed to establish a savings program built on the goals you want to achieve?