Taking baby steps and being patient is the best philosophy for saving. If you are a beginner and haven't began saving we will start crawling until you pick enough momentum to begin walking and eventually break into a full stride.
Step 1: Establishing an Emergency Fund will be your first priority. Set up automatic transfers from your checking to your savings. Try to save 10% of your salary, if that's to much - save what you can and work your way up to 10%.
After you have established your emergency fund with 3-6 months of expenses, your next savings goal will be:
Step 2: Saving for Retirement. Set up automatic payroll deductions to transfer into your company's 401K or other retirement account. Transfer 15% of your household income into your retirement account to be invested. If 15% will break the budget then contribute AT LEAST enough to get your company's match (usually 6% of your gross salary).
Depending on your household: a college fund may also be a necessity
Step 4: Establishing a College Fund: there are various options for these funds, depending on the age of your child. Percentage of income to be saved will depend on the estimated cost of attendance and other factors. More details on college funds will be posted soon.
If you have completed steps 1-4: CONGRATS!
Personally I have a separate savings account for "other wants" such as buying furniture, new car, holiday & birthday fund or anything else that might require a large amount of cash.
Step 5: Establish a Special Savings account for other discretionary spending.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give.
~William A. Ward
~William A. Ward