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Saving Money

5 Steps to Saving Money

5 Steps to get started with Saving Money

 

Costs add up fast, and building your
savings can seem like a pipe dream. But small changes now can yield big
benefits later. Follow these basic steps to start making meaningful progress
toward a brighter financial future.

1.
Think
one percent at a time

Resolve to put
just one percent of your income into savings over the next month. By doing so,
you’ll flip an important mental switch: Before, you were someone who wasn’t
saving for the long term, but now you are. That’s a key difference, because
it’s much easier to ramp up your savings if you’ve already formed the habit. So
however modest, take the first step.

2.
Get
analytical about your budget

You may think
you have no breathing room, but take a hard look at the money you shelled out
over the past month. Divide every cost into two categories: “need” and “want.”
Then go through your “wants.” Are you getting manicures when you could touch up
at home? Friday night takeout pizza when frozen would do? Reduce those extra
expenses to
create space in your budget
for regular saving.

3.
Prioritize
your future self

Each month, you
pay regular bills: your cell phone, your student loan, your rent. Add someone
else to that list: your future self. When you treat savings as mandatory, you
make it that much easier to stay serious about
staying on track.

4.
Make It
Automatic

Once you’ve
figured out how much you want to save each month, and you’re
confident you’ll pull in enough income to meet that goal, you can set
up automatic transfers between your checking and savings accounts. By
automating deposits, you can eliminate the temptation to redirect your
extra money to other things.

5.
Go
Slow and Steady

Saving money for a
down payment on a house, an emergency fund or a hard-earned vacation might seem
an impossible hurdle. But remember that you can achieve your most ambitious
savings goals if you work toward them gradually and in small increments. By
forming the basic habit of saving and by sticking to specific, attainable
goals, you’ll lay the groundwork for a lifetime of financial progress.

 

Better Money Habits
In Partnership with KHAN ACADEMY