If you want to save money, start by setting specific savings goals. Even if you get into the habit of putting money into your savings account regularly, you may still be tempted to take some out for impulse purchases. On the other hand, you may be less likely to spend money that you have set aside for a specific goal. Consider the following tips on how to save up money:
- The first step in learning how to save up money is to identify your goals. Why are you saving? You may be saving for the down payment on a house or a car. Alternatively, you may be saving for your retirement or for emergencies. Once you know why you are saving, you then need to determine the amount that you need to save.
- Once you know how much you need, it is a good idea to set a time frame for reaching your goal. This will help to motivate you to save. For example, if you want to move into your new home in a year, that would be how long you have to save up the down payment.
- Come up with the amount that you need to save each month so that you can reach your goal in the allotted time.
- You will then have to budget for that amount. Your options include having a portion of your paycheck direct deposited into a savings account or having your bank automatically move money from your checking account into your savings account when your salary is deposited.
- Try to find an account type that can help you to meet your goal. For shorter term goals, look at savings accounts with a high rate of return. For longer term goals, talk to a financial advisor on how you can best invest your money for the greatest return.
- If you are saving for more than one goal, you can keep all of the money in one account and use a ledger to determine how much goes to which goal. Another way to do it is to get separate accounts, one for each goal.