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Saving with a Plan

Saving is more than just putting money away.

Saving money seems like a pretty easy concept: you simply put some away and don’t spend it. Maybe you stash all your money in a safe place until you want to spend some. That’s a good start. But as you get older, you’ll need to get more specific with how you save your money and what you use to pay for things.

Saving and budgeting don’t have to be full of spreadsheets and notebooks that you update every time you buy something or make money. Here are a few saving and budgeting plans that will work great for someone just starting out.

Pay yourself first.saving

This is probably close to what you do now. You put away a set amount to save and then spend what is left. Make savings a priority.

The point of this method is to save as much as you can. A lot of budgeting methods save what’s left at the end of the month, and oftentimes that’s not a lot. The name is a little tricky, too; if the focus is to save first, why are you paying yourself first? You’re paying yourself for later in life and getting by on what is left.

50/30/20

Or 10/10/80 or 40/30/30 or any combinations of percentages. With the 50/30/20 plan you figure out how much you need to spend each month and that should be about 50% of your budget. Then 30% is for spending on whatever you want. The remaining 20% is for savings.

Obviously, your monthly expenses are kind of low. You don’t drive, pay rent, or pay bills. Swap the numbers out or pick totally different percentages based on how much money you get each month. Maybe you save 80% and only spend 20%. Or spend 10% and the other 10% goes into a college fund.

Zero budget.

Money comes in and the same money goes out. It might not sound like you’d save any money with this method, but you do, if you want to. A zero budget is usually the kind people think of when they see spreadsheets covered in different numbers and expenses and income.

You put how much you make at the top. Each line below that is something you’re paying for (an expense). Technically one of those expenses is your savings. As you spend, you subtract from the top number until you zero out your budget at the end.

“No” budget budget.

This method doesn’t mean that you just spend money like you don’t care. Quite the opposite really. You spend very conservatively and keep an eye on your accounts. You pay your bill, then save, and then keep an eye out while spending the rest.

The “no” in no budget means telling yourself no, a lot. You might feel like you can freely spend, but it is the complete opposite: you have to check and make sure you have the money before you buy anything. That takes a lot of self-control.

Saving money can be a challenge. There is a lot out there trying to convince you to part with your money. One thing you can do is make it slightly harder for you to get your money out. Putting your money in a savings account with your credit union means it isn’t in your pocket when you go to the store. As you get older, you might need to reconsider how you budget and save, but it’s always good to start early!

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