Money saved today, is money earned tomorrow

Saving money is a habit, and like all habits it has to been learned, practiced, and perfected. There are two key factors in creating good savings habits. The first key to saving, is making it a systematic practice that happens when times are good and when times are bad. Maybe the amount you save changes as your situation gets better or worse, but you always want to be doing it. A useful tool for making your savings a systematic practice is setting up a direct withdrawal every month from your checking account and transferring it to your savings account. It will be automatic so you don't have to think about it, it just happens. The second key to savings is having the money you save in a separate account that you rarely look at (out of sight out of mind). Whether that separate account be a money market account or an envelope under your mattress, keep it outside of your everyday cash flow account. The point here is if you're not always looking at it you won't have the temptation to spend it. Remember the two keys to creating good savings habits are systematic and separate. The earlier in life you can develop these habits, the earlier your money will start working for you.

Organizing your finances

The first step to understanding how money works, is keeping track of where your money goes. It is all too common that you get your paycheck and at the end of the month all your money is gone and you don't know where it went. In order stay on top of your finances you need to keep track of where you spend your money. This might sound simple, but the purpose of tracking your money is to find areas in which you may be wasteful or not using your money efficiently. Nine times out of ten, when you track you money, you will end up finding money that you didn't know you had before.
How to get started? It's simple, get a notebook and on one column record the money as it comes in (paycheck, dividends, etc). On the other column record money going out (mortgage, credit card charges, etc). Remember, it's important that you record everything, even if it's a dollar or two, accuracy will pay off. As the month comes and goes, you will now have your own personal cash flow statement. The first step to making your money work better for you.