There’s No Such Thing As “I Can’t Save”

There’s (almost) no such thing as a person who can’t save, says Money Magazine - only a person who won’t. For most people, saving is a matter of being disciplined and “paying yourself first”. If you’re having trouble putting away any savings, think about these tips:

• Track your spending for a month and note categories where you could easily save money - for example, cutting down on takeaway coffee or DVD rentals. Check the Bureau of Labor Statistics’ Consumer Expenditure Survey stats if you want to compare your spending to the “average American”.
• Use what author Walter Updegrave names the “two line budget”. The first line is how much you earn in a month; the second line is a calculation for 10% of this amount (the percentage could be more or less if need be, but around 10% is a great start). This is the amount you should save each month, simply by putting it into your savings account as soon as your pay check arrives, before a single dollar is spent on bills or anything else.
• The other alternative to transferring your 10% into a savings account is to sign up for a 401(k) or similar through your employer - this is even better because the savings will be tax-free, your employer may be contributing extra, and you don’t actually see this money - it is taken from your pay check before it gets to you, so there is no temptation to spend it.