Who wants to be worrying about money all the time?

Nobody does.

That's why right now you need to start building a lifetime habit of saving money. But for that habit to pay off, you need a plan.

• How much should you try to save, for instance?
• And how can you save more and still do the things you want to do?
• And where do you start?

Right Here

Here's step one:

1. Find out where your income is going before you decide what you can save.
   Most people have only a general idea of their expenses and spending. Logging everything you spend for two weeks to a month (even one week) can be eye opening. Knowing how much you are spending on nights out, random purchases (book, CD, movies, new computer gadget) and even groceries or cell phone bills often reveals places to save.

2. Then make a budget.
   A budget provides a plan for spending. It sets out your fixed and regular expenses like rent, utility payments, and car or loan/credit card payments and sets goals for other necessary but modifiable expenses such as how much you spend on groceries or clothes. Making a budget also helps you set limits for discretionary spending such as what you spend on entertainment, recreation, or optional travel. Put a savings goal in your budget.

3. Then memorize this most important rule: Pay yourself first!
   Paying yourself first before other expenses is the number one rule for successfully saving more. Many people discover that if they put aside a set amount in savings with every paycheck, then they don't really miss the money saved.

   • You can usually save money on bank fees and gain some perks by having your paycheck, Social Security check or pension check direct deposited into your checking account. You can also take advantage of payroll deduction and have portion of your paycheck deposited directly into an account where you are building your savings such as an Educators High Yield Money Market Account, which offers you a competitive return.

   • Even if you don't have your paycheck direct deposited, you can make a plan to contribute regularly to savings. You can still set up an Automatic Transfer from your checking account to savings. You can use other strategies for accumulating dollars to save. Some people, for example, pay with cash and place all coins and $1 and $5 bills left at the end of each day into their "change jar." Every one or two weeks, they deposit the proceeds of this change-jar savings plan. Even this small step can build savings more quickly than you imagine.

4. Pay as you go for regular expenses.
   If you make a rule that you must use cash, checks, or debit cards instead of credit for some of your expenses, you may be more likely to control spending on those items. Food, fuel, utilities, and clothing, might qualify for that list.

5. Be a disciplined shopper.
   You can support your goals by being a disciplined shopper.

   • For example, deciding what you're going to buy before you go to a store can cut down on impulse purchases.

   • Don't treat shopping as entertainment. Heading to the mall just for the fun of "shopping" often leads to unplanned spending. The best choice is to shop only when you have a necessary purchase. If you simply can't resist shopping as fun, take only a small amount of cash and leave credit cards, debit cards, and checks at home.

6. Downsize your purchases rather than supersize them.
   Do you really need those top-of-the-premium-line name-brand sneakers or sportswear rather than a more moderate line from the same manufacturer? How much would you save if you bought a slightly older used car rather than a newer one? How about an economical car instead of a gas-guzzling SUV? How about carpooling to get to work or school? Brown-bagging lunch rather than buying it out can regularly save about $5.00 per day.

7. Pay on time and manage your checking account wisely.
   Not only does not paying your bills and credit accounts in a timely manner hurt your credit rating, but paying late incurs late fees which can quickly mount to sizeable amounts of money. Bouncing a check or overdrawing your account with a debit card will also incur fees. Nationally, millions of consumers monthly pay millions of dollars in these fees. Manage your credit accounts and money wisely to avoid these unnecessary drains on your money.

8. Pay off high interest debt and credit cards.
   After you've got an emergency fund saved up, the next important step to finding more money for savings and even investment is to pay off the high-interest debt you have. That means credit card debt for most people. Carrying high balances even on lower-interest credit cards means that you are spending lots of dollars on interest payments. So when your emergency fund of six months coverage is in place, pay down high-interest debt. It doesn't make much sense to put additional savings aside at a 4% or 5% return while you are paying out 7% to 19% or more in interest on credit card debt.

9. Make a long range savings and investment plan.
   Making a long-range plan for growing your savings and wealth can give you not only the incentive to keep saving but can help put you and eventually your family on a more secure financial foundation and future.

Where to Stash Your Basic Savings

Basic or emergency savings must be both accessible and secure. Of course, you'd like to earn as good a return as possible, but you don't want to invest savings where you can't get the funds immediately when you need them or where there is a risk that you might lose money. Credit unions and banks offer several kinds of savings plans that meet these goals.

• Savings Accounts
  Most credit unions and banks have regular savings accounts that allow you to get to your money any time without any penalties.

• Money Market Accounts
  Money market accounts, also called money market deposit accounts, are savings accounts that typically offer higher yields than regular savings accounts. Most of these accounts also give you some access to your money.

• Certificate of Deposits
  Certificates of deposit (CD) area vehicle for investing a fixed amount of money for a fixed term usually at a fixed interest rate.

No Time Like the Present to Get Started

If building your basic savings is a goal for you and your family, the best time to get started is now. Why not plan to start recording where the money goes with tomorrow morning's sausage biscuit or double latte-to-go. Before you've dumped too many days' change in the jar, you'll be ready to identify where you can save, open the right account (if you don't have one already), and start making regular contributions. Peace of mind will follow increasing savings—that's a promise.

Cheers, Will