Financial Education: Pay Yourself First
How Money Grows
Tips to Help You Save Money
Saving money doesn't have to be hard. Take a look at some of the saving tips listed
1. Consider needs vs. 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 a cell phone?
2. Direct deposit or automatic transfer to savings.
• When you get paid, put a portion in savings through direct deposit or automatic transfer.
• If you have a checking account, you can sign up to have money moved into your savings account every month. What you don't see, you won't miss!
• U.S. savings bonds can be purchased through payroll deducation.
• Make savings a habit!
3. Pay your bills on time. This saves the added expense of:
• Late fees
• Extra interest charges
• Disconnection fees for phone, electricity or other services
• Fees to reestablish connection if your service is disconnected
• The cost of eviction
• Repossession of cars or other possessions
• Bill collectors
4. If you use check-cashing stores regularly, you might pay $3 - $5 for each
check you cash. This can easily add up to several hundred dollars in fees every
year. Consider opening a checking account at a bank or credit union.
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 build up long-term financial security. For example,
avoid borrowing money for things that do not provide financial benefits or that
do not last as long as the loan. Examples include: a vacation, clothing and dinners
out in restaurants. Examples of debt that helps build long-term financial security
• Paying for college education (for you or your
• Buying or remodeling a house
• Buying a car to get to work
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, save as much of it as possible.
11. If your employer offers a retirement plan, such as a 401(k) or 403(b) plan
that deducts money from your paycheck, join in! Many employers will match a portion
of your contributions. 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 2-6 months of expenses in case of emergency. Make sure you have an emergency
savings account before considering investing in non-deposit 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 more quickly, similar to compounding.
14. If you are interested in learning about investing, you might want to consider
an investment club. The National Association of Investment Clubs (NAIC) is the corporation
that supports this investment style. 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-$10).
We have reviewed why it is important to save and identified some tips for saving
money. Now let's look at the real benefit of saving money --
how your money can