by Cody Hodge

Created on: March 03, 2009

The most important thing you can do for yourself financially is have a good, solid savings plan for yourself. It doesn't have to be anything fancy, and it doesn't have to be more money than you can afford to keep hidden, but it should be something that you can rely on, and something that you do on a regular basis. Anything that you can sock away for a rainy day is a good start, and anything that can help you out when you might lose an income, or have to cough up some extra cash for an emergency is better than nothing.

The biggest key to savings is actually making a plan, and then sticking to that plan. If you make a plan that is to ambitious, you may have a hard time keeping up with it. If you make a plan that is too weak, you may not actually end up saving anything at all, and you will be stuck. Make a plan that strikes a good balance between what you might need for the future, and what you can actually afford to put away right now.

Say you make 1,000 a month, and your bills total 700 dollars a month. You have 300 dollars left over every month as disposable income. Say you want to spend about 60 dollars a week between gas, food, and entertainment, which when multiplied by four weeks, equals 240 dollars. So you have 60 dollars left every month, which you should put into savings.

This is a plan that you wold likely be able to stick too because it takes into account all your spending needs, and even money that you will spend outside of just paying your bills. The money you have left over isn't really needed for anything, so you're just going to put it into the bank anyway. There it will sit gathering interest for you, and you won't have to fret over using it, because you don't have to spend it on anything you need.

If you were making 1,000 a month, and you had 800 in bills, and you wanted to save the remaining 200, well thats not going to work. You still need money to spend, and so you aren't going to actually save that extra money, you will probably get stressed out, and spend more than you would if you had a solid plan in place. In fact, not having a plan, or being too ambitious with a savings plan can actually cause you to spend more.

Sticking to a savings plan is all about effort, and planning. Be smart about what you budget for savings, and don't worry if you can't save every month, because life can always change. However, if you have a stable budget every month, make sure you are saving, and make sure that savings is money that you aren't spending, and that you don't absolutely need to spend to survive. It can be tough starting out, but if you stick to your plan it will make life much easier later on.

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