How Do Guys Save Money (and Gals)

This article is about how to build a savings account and having a savings plan. It can be used for teaching teens to save money, children, and even you. Money saving secrets aren’t secrets at all. They just require application. So here is what you need to do.

1. Pay yourself first. The suggested amount is 10%. Every time you get paid, you should allocate 10 percent to your savings account before paying anyone else. You say you can’t afford to do that? You really can’t afford not to. So to get started, here is what you do.
   
   Open a savings account, preferably at a different bank than the one you normally use. This makes it less convenient to withdraw the money. Then set up a direct deposit of $10 per paycheck to that bank account. You should be able to have the majority of your paycheck go to your regular bank account, and $10 go to your savings account at another bank.

   When I had a job where I was paid every other week (I now work for myself from home), I had the majority of my paycheck deposited into my checking account, and $50 going into my savings account at the same bank, and $50 going into a savings account at another bank. For further encouragement as to how this works, I suggest you get the audio CD of the book The Richest Man in Babylon.

   Whenever you get a raise, increase the amount you have going into savings by about half of the take home increase. So if you are now taking home an extra $20 per week, add another $10 to your direct deposit so that you are now depositing $20 per paycheck.

When the money goes directly into the savings account, you won’t miss it. You will find that you really could find a way to live without that extra $10, like skipping the $3 cup of coffee every morning and making your own instead.

2. The rule of 72.

   If you compound your interest annually, the rule of 72 gives you a calculation for how long it will take you to double your money. The formula is:

   72 divided by interest rate equals years

   72 / 4.5 = 16 years

   72 / 8 = 9 years

   That’s a big difference. If you can get an 8% return on your money, you can double your money in 9 years!

So let’s get started. You can open an online savings account at HSBC by clicking here. They are currently paying 3.50% interest with no monthly fees and no minimum balance requirement. You do have to deposit $1 in order to activate the account. You do not have to open a checking account with this one, you can just open a savings account.

So get started with a savings account today.