5 Easy Ways to Start Saving Money

When you put savings on automatic, it's easier to save and you don't have to think about.

Most of us have to save for the things really want out of life. Whether it’s a college fund, house down payment, pay-off credit cards, build a nest egg or take a dream vacation, a savings plan can help you reach financial goals faster.

But getting started with a savings plan can be difficult to figure out.

Here are 5 easy ways to start saving money:

1. Record your expenses

In order to start a savings plan you’ve got to know where your money is going. Make recording your expenses easy. Get a notepad or even an app on your smartphone to record your daily spending. Record every dime you spend for about a month. That means every coffee, lunch, snack, your mortgage, utilities, magazines or newspaper, lottery tickets, hair product…everything. Know where you are spending money. Once you have the data organize the numbers in categories of groceries, dining out, mortgage, entertainment, etc.

2. Spend Less

Now that you have a record of your expenses look for ways to spend less. Something that seems minor like a $3.00 cup of coffee everyday can add up over 30 days – That’s $90. Cutting something small can add up. When you cut small items you add a savings to your budget. Look for non-essentials that you can spend less on - entertainment, dining out, etc. You will be surprised with how much extra money can be accumulated.

3. Set savings goals

Setting savings goals makes it much easier to get started. Pick a reason or several reasons you want to save money. And, remember a savings plan can also include something fun where you splurge on yourself. Set your goals and stick with them. Decide how long it will take to reach each goal.

Some goals could be:

· Emergency fund to cover at least 6-12 months in case of job loss or other emergencies.

· Down Payment for a Mortgage or a New Car

· Remodel

· Vacation

· Education

· Retirement

· Computer Equipment

· Entertainment System

· Designer Handbag

· Expensive Watch

4. Save by Automatic Transfers

Once you cut non-essential items from your budget try to save at least 10-15 percent of your net income. It may be less or perhaps more than 10-15 percent, just start where you can but make it automatic. Saving money becomes much easier with automatic transfers.

By moving money out of your checking account, you'll be less likely to spend funds that you wanted earmarked for savings. There are many options for setting up transfers. You choose how often you want to transfer money and which accounts you want the money transferred between. You may even want to open a savings account at a separate bank. Having a savings out of sight of your regular bank may help make it easier to maintain.

5. Move Your Savings Online

Consider using these FDIC-insured online deposit accounts for short and long-term savings goals. Online savings accounts can be easily set up with funds coming from your regular checking account. Putting your savings strategy on automatic means it will be easy to stick with.

Online high-yield savings account typically have higher rates than the national savings average.

High-yield CD (certificate of deposit) which locks in your money at a specific interest rate for a specific period of time. FDIC-Insured IRAs are built for purposes such as retirement savings. Securities, like stocks and mutual funds are available through brokerage accounts that can be opened online.

Remember that securities, such as stocks and mutual funds, are not insured by the FDIC and are subject to investment risks including the possible loss of principal invested.