14 Tips on Saving Money: Pay Yourself First!

1. Consider needs versus wants.
Think about the items you purchase on a regular basis. These add up. Where can you save? Do you eat out at restaurants a lot? Can you cut back on daily expenses, such as coffee, candy, soda, or cigarettes? Do you have services you do not really need, such as cable television or Internet access on your cell phone?

What you do not see you do not miss! You may purchase U.S. Savings Bonds through payroll deduction.

2. Direct deposit or automatic transfer to savings.
When you get paid, put a portion in savings through direct deposit or automatic transfer.

3. Pay your bills on time.
This saves the added expense of:
• Late fees
• Extra finance charges
• Disconnecting/reconnecting fees for utilities such as phone or electricity
• The cost of eviction
• Repossession
• Bill collectors
• Higher interest rates from creditors in the future

4. If you cash your paychecks regularly, you might consider direct deposit into a checking account or on a prepaid debit card.

5. If you get a raise or bonus from your employer.
Save that extra money!

6. If you have paid off a loan.
Keep making the monthly payments to yourself. You can save or invest the money for your future goals.

7. If you receive cash as a gift, save at least part of it.

8. Avoid debt that does not provide some type of short or long-term financial benefit.
For example, avoid borrowing money for things that do not last as long as the loan. Examples include: a vacation, gifts and dinners out in restaurants. Examples of debt that can provide a financial benefit include borrowing money to:
• Pay for an education
• Buy or remodel a house
• Buy a car to get to work
• Start or expand a business.
• Make a purchase today that would cost more in the future.
• Pay bills today when waiting would be more expensive.

9. Save your change at the end of the day.
Take that change and deposit it into the bank every week or month.

10. When you get a tax refund, pay off debt or save as much of it as possible.

11. If your work offers a retirement plan, such as a 401(k) or 403(b) plan that deducts money from your paycheck, join it! Most employers will match up to $.50 on each dollar you contribute. The matched amount is free money!

12. If you decide to make investments.
Do your homework. Know what you are investing in. Get professional advice if you need it. You should have enough money in savings to pay for 2 to 6 months of expenses in case of emergency. Make sure you have an emergency savings account before considering investing in nondeposit products.

13. If you own stocks, reinvest the dividends to purchase more stocks.
Some companies offer an easy way to do this called a Dividend Reinvestment
Program (DRIP). This process increases your investment faster, similar to compounding.

14. If you are interested in learning about investing.
Consider joining an investment club. Investment clubs are groups of people who work together to understand the process and value of investing even small amounts of money (as little as $5 to $10).