April is financial literacy month, and what a better way to celebrate than starting a savings plan.
No matter your stage of life, it’s important to have savings: Whether it’s for a special purchase, a college education, your first home, retirement, or an emergency fund. But just how do you get started and stay on course? Here are a few tips to help you reach your savings goal.
- Create a budget. The first step toward taking control of your financial life is to evaluate how much money you take in and how much money you spend.
- Pay yourself first. Consider a payroll savings plan where a certain amount goes directly into your savings account each payday.
- Get to know the value of compound interest. It’s the interest you earn on your initial investment plus all the interest that accumulates over time. It makes your investment grow at a faster rate than simple interest, which is interest earned only on your original investment.
- Keep it going. If you get a raise at work, bank it. If you pay off your car, bank the monthly payments. If you’re not sure you’ll remember to make the deposits, consider automated transfers from your checking account to your savings or investment account. That way you never even notice it. If you were able to live on less before, you can continue to.
For more tips and resources to help you reach your savings goal, check out It’s never too early — or too late — to save.