Start the New Year Right

One of the most important steps in saving money isn't coupon cutting or careful shopping or any other of the suggestions I've made, it's setting aside money to not spend, to perhaps never spend but at least not to spend for a very long time: in other words, saving money. Besides avoiding spending money, two things in particular help make the idea into a reality:

1) Have a reason to save money. One of the best ways to give yourself a reason is to consider what you want for when you finally get around to retiring: just a comfortable retirement, a cruise, a particular vision of what counts as a great retirement house? A lifestyle appropriate to being grandma or grandpa? The clearer the picutre of what yo wnat to do with the money, the more specific, the more aware of what that will cost to achieve, the more real and reachable it will seem and the greater the incentive it will provide.

2) A plan to get there. Savings now translate to twice that later, so set a high but achievable goal for how much more money you want in the bank by the end of the year than you have now. 10 percent of income is a good place to start your calculations. If necessary payments take up a large percentage of income, an adjustment down may be necessary. IF income is variable, more when income is higher and less when income is lower may be the way to go.

3) It helps but isn't necessary to have a plan of attack, such as a regular transfer of money from checking to savings, regular deposits, or a common purchase that will no longer be made in order to free up more cash for the savings jar.