Everyone will tell you that you have to begin saving money early in life, but that happens to coincide with a time when you are making the least amount of money you ever will. How can you save money when you don’t make any? But, if you take a look at the price of some of the unnecessary items that you buy in your daily life (a $5 cup of coffee???), you will realize that saving money might not be as difficult as it sounds.
There is one way that more and more people are using to put aside just a little money every week or every month and that is an online savings account. Unlike a traditional savings account at a bank that would charge you a fee if you didn’t have a minimum balance, you will find that most online savings institutions are happy to set you up with a savings account to help you start saving money.
Even so, it does seem difficult for most people to really think that they can save money. The trick is to think of your savings account not as somewhere you put your extra money each month, but rather as a bill that absolutely has to be paid each month. Pay yourself – in other words, pay your savings account – before you buy your coffee or the new pair of shoes.
One of the easiest ways to begin saving money is to set up an automatic investment account. By having money transferred from one account to an online savings account, you can begin saving money before you even know it. Most people who take part in this kind of savings plan actually forget that they are saving and it isn’t until they see their savings account balance at the end of the quarter that they actually realize how much money they have put aside.
A good trick to make sure that you keep saving money and don’t spend it is to ask the bank not to issue you an ATM card, at least for a while. If you don’t have easy access to your money, then chances are you won’t spend it. Of course you can always transfer it back to your other account, but that isn’t in your best interest at all.
Instead of trying to save $100 per month, it seems that it is easier for most people to save $25 per week. This is obviously a psychological issue because it is less painful to let go of $25 than it is $100, and over time, you might find that you can actually afford $30 instead.
The earlier in your life that you start saving money, the more it will have the opportunity to grow. The power of interest is actually quite incredible and as you begin to see your bank account grow, you will find it easier and easier to set money aside. By just cutting out one or two of those coffees each week, you can build yourself a nice little bundle of cash over a year or so.