Make saving money part of your long-term financial planning. Start with small, practical steps in your money management strategy that focus on spending less and saving more. It might not seem that what you do makes much of a difference at first, but eventually you'll see results. Nothing makes your money grow more quickly than developing good financial habits. Simple steps pave the way to building a secure financial future.
Save regularly. Have a certain amount of your paycheck automatically deposited into your savings account every payday. Talk to your bank to set up a schedule to transfer the money from your checking account to your savings account. Irvin G. Schorsch III, President of Pennsylvania Capital Management, recommends saving 10 to 20 percent of every dollar you earn. After the money is in your savings account, pretend that it isn't there so that you don't touch it.
Explore different savings options. Put your money into a high-yield savings account or certificate of deposit instead of a traditional savings account. Your money will earn more interest and grow at a faster rate. Some banks offer a higher interest rate if you maintain a higher balance in your savings account.
Invest some of your money to earn higher returns over time. Diversify your investment portfolio to reduce your risk and maximize your returns. By investing in stocks and mutual funds, your money could grow faster. Although there is the chance that you could lose money, historically, investing in the stock market brings in higher returns in the long term than other types of investments.
Pay down your debts. The less money you pay out on expenses each month, the more money you have to save and invest. When you pay off credit card bills and other revolving debts, you not only save the money you make in payments each month, you also save money on the high interest rates you are paying. Avoid taking on new debt by not spending more money than you have coming in each month.
Reduce your spending by cutting expenses. Create a budget and don't stray from it. You can reach your financial goals easier when you know exactly where every dollar of your money is going. Take a careful look at your spending habits to find ways to cut costs. List every expense you have and then ask yourself whether you really need it. If you can do without it, slash the expense from your budget and invest the money you save.
Tax yourself. Each time you buy something, put a percentage of the money you spend into your savings. Try to set aside 10 percent of every dollar you spend. If your budget can't afford that much, set aside a lesser amount. Any time you can afford to save more, do it.