Monday, December 21, 2009

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.

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