Get Serious About Saving Money

This is a guest post from Philip Taylor, who blogs daily at PT Money: Personal Finance, where the focus is on making money, saving money, and spending money wisely.

wish they had a little more in cash savings.

With the recent downturn and uncertainty in our economy, it’s now more important than ever to build up a nice savings account balance. Unfortunately, just wanting to save more won’t cut it. You need to get serious about your money saving efforts.

Here are a few steps to get you started with seriously saving your money:

1. Set Specific Savings Goals

Giving yourself a few specific savings goals will help to provide guidance on how much to save each month. Additionally, setting specific goals should provide extra motivation to help you succeed in your efforts.

Some example savings goals:

• Save up an emergency fund of cash (3 to 6 months of living expenses) by the end of this year.
• Save enough money by summer to take a family vacation without the need of credit cards.
• Save up to pay for Christmas gifts for everyone in your family.
• Save enough for a 20% down payment on your first home, to be purchased in two years.

Now that you have a few specific goals in mind, simply divide the total dollar amount of each goal by the number of pay periods there are between now and the date you’d like to achieve your goal. That will give you the dollar amount you need to begin saving each paycheck.

2. Get Paid to Save

Up next, you’ll need to find a nice place to keep this money while you’re saving towards your goals. Serious savers find a savings account that pays a competitive interest rate. A basic savings account will pay you interests somewhere around .10%. That kind of rate won’t even help your money keep up with the U.S. Inflation Rate. There are actually several great alternatives to traditional savings accounts that pay decent interest rates around 1.00%. Perform an internet search for “high-yield savings account” to find some good options. Even if you already have a regular checking and savings account, consider opening up a high-yield savings account to help you reach your savings goals even faster.

3. Insure Your Savings

The Madoff Scheme has shown us the importance of finding a secure location to stash your money. So that you won’t have to worry if your money is secure, make sure the savings account you chose is FDIC insured. This will automatically insure your savings account for up to $250,000. Most high-yield savings accounts are FDIC Insured.

4. Make it Automatic

Last but certainly not least, the serious saver uses automatic savings deposits. Relying on what’s left over at the end of the month and self-discipline just won’t cut it. You need to set yourself up to succeed by taking the self-discipline out of the picture and begin paying yourself first. The best way to do this is to tell your employer to automatically deposit a percentage of your earnings directly into your new savings account each time you are paid. Typically, you’ll simply need to provide your employer with your savings account bank account and routing number. Once you have it set up, you can forget it and know that you’re taking care of your savings first.

Best of luck getting serious with your saving!