Sarah: Hi! I am Sarah with Wells Fargo and Company. Today we are going to discuss some tips on how to become a better saver. The more money you save, the quicker you can reach the financial goals that you set for yourself.
You can start by putting together a savings plan. Then you can take a look at how you spend your money. First, you should consider needs versus wants. Think about items you can do without or cut down on. Do you need to eat out once a week? Make it once or twice a month and you save immediately and start adding to your monthly savings.
You could also cut back on your expenses simply by paying your bills on time. This will allow you to avoid late fees and extra finance targets. If you have paid off a loan keep making those same monthly payments to yourself instead and you will see your savings really start to grow.
Your savings plan will be most effective if you make it systematic or automatic. You should put a portion of every pay check into savings using direct deposit or recurring automatic transfer from your checking account.
An important principle is to pay yourself first, that's right decide on a percentage of your income to set aside at the beginning of each month rather than waiting to see what's left at the end of the month. This may also help you to send money only on the things that you really need.
A good place to start is 5% of every paycheck. But it's even better if you can afford to put away 10% or more. In addition to your automatic deposits, you could put extra money into savings whenever you can.
You may end up receiving money that isn't part of your regular pay such a raise or bonus, tax free fund or even a gift. Put that money or part of it directly into your savings.
If you take these steps, your savings will really grow and you financial situation will be significantly improved.
Videos in this Series
Key Steps to Saving Better