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Saving Tricks

clothespin imageSaving money is easy for some of us. But it takes some real effort for many of us. Saving means resisting the urge to buy those fantastic shoes or new video game. Taking control of how you handle money today means you have more choices in the future. Here are some tricks to help you save more money.

Trick #1: Pay yourself FIRST

Most people decide how much they can save after they look at all their usual expenses. For adults, this can be rent or house payments, phone and cable bills, groceries, car insurance and all sorts of other bills. The trick is to make savings as important as all those expenses. So pay yourself first – put away the amount you planned to save before you do anything else. Why? Most of us have money each month that we can’t track. We spent it somewhere! So save it first!

Your parents may ask their employer to take a certain amount of money out of each of their paychecks and put it in an investment fund, a kind of savings account. The idea is that if they never get their hands on this money, they can't be tempted to spend it. Talk to your parents about how you might do this with your paycheck (if you have begun to work), your allowance, or money you receive as gifts.

Trick #2: Saving is linked to expenses

How much should you save? The short answer is as much as you can. What does that mean? It means different things to different people. Here's why.

Two baggers at the grocery store both get the same paycheck. However, one bagger, Tom, must use his paycheck to pay for gas when he uses the family car and his entertainment. The other bagger, JoAnne, must pay only for "extra" things she wants but doesn't need. Her parents pay for most of her expenses. JoAnne should be saving more because she doesn't have as many expenses. Expenses are "things" you spend money on. JoAnne has fewer expenses than Tom.

However, no matter how much money you earn or how many expenses you have, you will always save more if you pay yourself first.

Trick #3: Find out where it goes

Get a notebook and start writing down any money you spend. See Keeping a Money Diary in the Tracking Section. List what you bought, how much it cost, and why you bought the item. Your money diary will teach you something about yourself. For example, you may find that you spend $5-10 a week on snacks from vending machines at school or at frequent stops at the local quick mart.

Trick #4: Cut your expenses

Everyone has expenses they can cut. Café mochas at $3 each do add up. So does junk food for lunch at school. Packing a lunch may seem like work, or may not be cool, but it can cut your expenses fast. Your school may be trying to encourage healthier eating. Packing simple healthy snacks of fruit, energy bars, and water will get you through the day and keep your energy up.

Let's say you plan to cut down on the amount of money you spend. You buy food at the grocery store at cheaper prices. You take the time to pack a lunch and an after-school snack. You take fewer trips to your favorite coffee shop. What happens? You find that you have an extra $9 in your pocket each week! That’s $36 a month! Save it in a savings account and earn interest on it. Over a year, you will save $432 and earn $13 in interest. Not bad! And how hard was it really?

Trick #5: When you do spend, be a smart shopper

Okay so $36 extra each month is burning a hole in your pocket. Pay yourself first. Put it in savings. But you discover that new expenses will come up. You may want a new bike or a MP3 player. You may be an artist, and paints are expensive. Do some comparative shopping and get the best price. Learn more under Spending.

Trick #6: Beware of online advice

If you participate in online social networks, be cautious with the advice you may get. Get the latest fashion trends, but know that not everything you find online is true or from an expert.