How to Save Money: Make it automatic and watch your savings skyrocket!

Think you already know how to save money? Are you doing everything you can to maximize your savings? Are you paying yourself first or last?

Like everyone else you probably think you already know everything you need to know about how to save money. It's a pretty simple concept after all, not exactly rocket science right?

Ask yourself these two questions:

1) Am I doing everything I can to maximize my savings?
2) Am I paying myself first?

If you answered 'yes' to both questions congratulations! You do know how to save money and are probably right on track to reach your savings goal(s). If you answered 'no' to either question, don't worry! I can show you how to save money automatically and get the most you possibly can out of your savings - it's really simple!

Nobody can dispute the importance of saving money, we all start out with the intention to put away money. Somehow life always seems to get in the way, it has a funny way of gobbling up all the money you had stashed away for savings. It's that same old story played over and over. You promise yourself that next month will be different and that you will put some money into savings no matter what. But another month goes by, stuff happens and once again you end up saving $0.

Sound familiar?

Learn to pay yourself first

Are your taxes always paid on time? Of course they are! Why? Because they get taken out automatically. Since the money is automatically deducted from your pay or bank account, you never come into contact with it and therefore you can't spend it on anything else. Clever isn't it! The government never misses a payment and you don't end up with a tax debt come tax season.

There's a lesson to be learned here. Taking a page from the government's play book, you too can pay yourself first by making your savings plan automatic. I don't mean merely reminding yourself to put money in the bank as soon as you get paid. That's just doing what you've always done - we both know that just doesn't work. Set up an automatic deduction like the government does and you will never miss a deposit to your savings account.

Talk to whoever does the payroll for your employer only after you:

• Determine how much you can commit to your savings each pay period
• Establish your savings goal(s), long term and short term
• Setup or choose the right kind of account for your deposits to go into

Let's get started!

Step 1: Figure out how much money you can save

As a rule of thumb you should strive to save atleast 10% of your net income. If you can't save 10% don't sweat it. The important thing is to save something, anything, no matter how small the amount. Why? Because you will already have set the ground work for saving more money in the future when your circumstances improve. Also, you will already know how to save money and you will be accustomed to paying yourself first.

TIP: Making your savings automatic means increasing the amount of money you deposit will require little or no effort on your part as the system will already be in place.

Consider getting on a budget to get a clearer picture of your finances and to determine how much you can afford to put into savings. A good budget can also help you free up even more money to save by reducing your variable expenses and stop you from overspending.

Step 2: Set a realistic savings goal

Having a savings goal is important. Set your goal by asking yourself what you want to save money for? Maybe you want to save enough money to buy a new car or save for a down payment on a home. Perhaps you are saving money for college or you started thinking of saving money for retirement.

Whatever goal you set for yourself, it has to be something important or matters to you a great deal. Your goal should also be as specific as possible with exact dollar amounts and dates. Visualizing your goal will help you stay focused on the task of saving money. Also, you won't mind making short term sacrifices to save money because the payoff in the long term will easily outweigh everything else.

TIP: Don't set yourself up for disappointment by setting unrealistic goals for yourself. Take special care in setting a goal that is attainable within a reasonable time frame.

Step 3: Set up accounts for your deposits

In this step you will need to iron out details such as how much money goes where. For example if your savings goal is to build up your emergency fund you should put it into a high interest savings account (short term) because it would have to be liquid or accessible in case of an emergency. On the other hand, if your goal is to fund your child's college education you should put it into an RESP account (long term). Your savings goal will dictate the types of accounts you choose to deposit your money into.

TIP: Consult with your bank or investment advisor about the most suitable account or investment for your savings goal.

Step 4: Make it automatic

By now you should:

1. Know exactly how much money you have to work with
2. Have one or more savings goals in mind
3. Have the right accounts set up and in place for your deposits

With that in mind it's time to make it happen. Time to automate your savings! Making it automatic is a 3 step process:

• First you will need to prioritize your goals.
• Then you will need to figure out how much money to put towards each goal.
• Finally you will need to work with your company's payroll and your banker to set up the automatic deductions from your payroll or bank account into whatever savings account or investment vehicle you have in place be it through your work place or on your own.

TIP: For long term savings goals such as saving for retirement take advantage of whatever contribution matching programs your company offers. It's FREE money!

Now for the best part -sit back and watch your savings skyrocket!

There you have it that's how to save money automatically and without fail.

More How to Save Money Resources

• If you want to know more about how to save money and goal setting theory read this article or visit Financial Planning Infoguide a comprehensive guide to achieve your dreams and goals.
• For more tips on how to save money go to Money Saving Tips
• Start your children early, teach them how to save money
• Trying to teach your teen how to save money go to Money Saving Tips for Teens
• Learn how to save money using these Money Saving Techniques

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Table of Content

Money Saving Tips - Looking for money saving tips you can actually use? Well if it's savings you want, it's savings you'll get - right here! Lots of money saving tips on everything from gas to groceries.

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Budgeting Tips - Looking for budgeting tips that work? Basic budgeting guidelines plus top 10 budgeting tips to help you set up your budget that works.

How to Create a Budget - Learn how to create a budget that not only works but one that you can actually live with! A good budget is one that allows you to easily manage your personal finances without cutting out any of the things you enjoy in life.

Personal Budgeting Strategies - Want to know which personal budgeting strategies are most effective? Here are three different personal budgeting strategies as well as the pros and cons of each strategy.

Living On A Budget - Think living on a budget is only for people on a fixed or low income and couldn't possibly apply to you? Are you worried that a budget will only reduce the standard of living you currently enjoy? Not worth the hassle?

Cash Budget - What is a cash budget, really? Does it involve getting rid of
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Personal Budget Software - Need help finding quality personal budget software? How about a program that's both user friendly and makes budgeting fun? Oh, and you probably want
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Getting Out of Debt - What's the best way of getting out of debt? Are you confused about all the different debt solutions available? If you're in debt and considering options such as a debt consolidation loan, credit counselling or restructuring your mortgage to include some or all of your debt...READ on!

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