Many people across the nation find it difficult to grow their savings because the temptation to spend money is everywhere. People are spending on all of the items that television and radio commercials are telling us that we need on a constant basis, draining savings accounts across the country as people try to keep up with the purchases of their friends and neighbors. Because of this, many people have trouble saving for the future but the easiest way to make sure you are saving part of your salary every month is by putting the money away before you can spend it.
Automatic Savings Account Deposits
The most efficient way for many people to grow their savings is to transfer money into a savings account as soon as the person receives their paycheck. This takes the money out of their checking account or their pocket before they spend it on items that are unnecessary. With this technique, the person will take 10% of their pay and transfer the money to a savings account that accumulates interest, leaving it there until the money is needed for an emergency situation.
By taking the money out of the paycheck as soon as the person gets paid, the risk that the person will spend it instead of saving it is dramatically reduced. Everyone has had an experience where they have walked into a store intending to grab one item and ended up buying much more than they intended. Passing up a bargain may be hard, but most of these people will not spend money that they do not have and the person will not count on the money intended for savings if it is not showing in the balance of their checking account.
Setting Spending Limits
One of the greatest causes of individuals falling into debt is their habit of spending beyond their means each month. Nobody should spend all of the money that they bring home each month, even if the person is working for minimum wage or work on commission. Living paycheck to paycheck and having all of your money spent before you get your paycheck means that a reevaluation of your lifestyle is needed quickly before you find yourself in a situation that is hard to extract yourself from. Once you have determined your spending trends and eliminated wasteful spending, you should able to save at least 10% of the money that you earn in an interest bearing savings account.