So it’s the end of the month and your friend calls you up: there’s a dinner party tonight, and your presence is requested. So you open up your wallet to look for cab fare and a decent bottle of wine to bring and… the only thing in there is a dollar bill and an old dry-cleaning receipt. “Ummm, I’m really tired tonight. I’ll pass.”
It can be hard to balance your desire to save money with your everyday needs. It can be done, but you have to do it by getting smart about savings the way you’re smart about other areas of your life.
How do you do it? Pay yourself first.
How? Consider automatic deductions for savings right off the top of your paycheck. If you don’t have the money readily available, you won’t notice it’s gone. It’s kind of like your taxes getting taken off your paycheck automatically—you never had that money in your wallet, so it never feels like it’s being taken away from you.
So why not play tax man yourself? That way you’re saving for something for your future, be it a trip to Paris or for a down payment on a home for your family.
Paying yourself first means savings for later. But it’s also a way to achieve goals. Want that new home? Set a bit of your paycheck aside in a special account. It’s called targeted savings, and it can help you stay focused on your goal and help set yourself up for a brighter future.
While you’re at it, you can also start a targeted savings account for stocks you’d like to own. Even if you only buy one stock, it’s a good lesson because you’ll learn to be very thorough with researching where you put your money. And if you’re short of ideas and want to try to practice a little bit first, hit up WeSeed and get your practice in the stock market before you try it for real.
Jennifer Openshaw, author of "The Millionaire Zone", is co-founder and president of WeSeed.com, whose mission is to help real, everyday people use what they know and love to learn about stocks, make smarter money decisions and ultimately take control of their financial destinies. You can reach her at jopenshaw@weseed.com.
The views expressed here are those of the author and do not necessarily reflect the positions of LendingTree, LLC.
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