Follow the steps below to learn how to have more of the cheese:
1. SET YOUR TARGETS. Choose an amount that you consider yourself capable of saving each month.
Tips: For example, you may choose a percentage of your income. Or it might be helpful to set an amount to be deducted automatically from your pay and deposited to your savings account at a financial institution. Also, if you have already worked on your budget, you may choose to include this amount as part of the expenses in your budget. These options will strengthen your commitment and save you time.
2. MATCH. Be sure to match your savings target with your Calendar. Months like December might be different than others, as it is most probable that you will spend more than usual on buying gifts and dining out. Be sure to set a limit (budget) on the amount to spend on gifts.
Your budget will allow you to see where and when you can save more!
3. PLAN. A savings goal will keep you motivated. Your plan can be as simple as establishing an emergency fund, or as big as the down payment towards buying a house. Saving allows you to reach your goals.
4. PUT YOUR MONEY INTO A SAVINGS ACCOUNT. Find out about the different types of accounts for saving money that banks and other financial institutions, such as credit unions, offer and which one is more convenient for your needs. Some details you should ask in order for you to compare and choose the savings account that best suits you are:
- What is the minimum deposit required?
- What benefit does this account offer?
- What interest rate will you receive on your savings?
- How often can you access this money without any charge?
- What fees and charges apply?
As you will see, conditions may vary among institutions. While doing your research, it is recommended that you take notes on the services, costs and benefits of banks and other financial institutions that interest you. Compare at least 2 and then choose.
5. TAKE ADVANTAGE OF COMPOUNDED INTEREST. Having a savings account allows you to gain interest on the money that you save. But there is an additional bonus: you earn interest on the interest that stays in your savings account. This is known as compounded interest. In other words, you are gaining in two different ways: (1) interest income on your savings and (2) interest on the interest that you earn in your savings account. This is only possible if you don’t spend your interest payments when you receive them.
Tip: Remember, the more savings you have, the closer you will be towards accomplishing your financial goals.
See Compound Interest Calculators. Learn more about Compound Returns.
6. GIVE YOURSELF A REWARD. Compensate yourself moderately with something you like when you exceed your savings goal.
Personal Financial Tips
- Pay your bills on time.
- Eat more at home and less out.
- Take your food to work.
- Forgo the ice cream store and pop popcorn at home.