Pay Yourself First!

Easier said than done, you say....

I think not. I know it is not easy to save money, especially in this economy, but you can save money. Here's what I do:

I am lucky enough to work for an employer that offers a 401k with a 50% match on the first 6% I contribute. To me, that's free money. Every pay-period, I contribute the first 6% of my pay to my 401k.

Next, I direct-deposit the next 10% of my pay to a high-yield-interest savings account. I know many of you are thinking, "There's no way I can afford 10% of my pay, I'm living paycheck-to-paycheck as it is...." Trust me, I understand. I started this 5 years ago and have not withdrawn a penny from that account. I now have over $13,000 saved up! Now that's not just 10% deposits that went into my account. I also added any extra money left in my checking account after I paid my bills and had enough spending money for the week.

I also save all my change. I deposit the change into the account when the 'piggy bank' gets full. I bet I've saved up a couple of thousand dollars from loose change alone.

I recommend an online-only bank that you will not have 'instant' access to. I have an ING Orange account, but there are many similar banks with higher interest rates than you will be able to receive from any local bank or credit union savings account.

CD's are another option, but you have to tie up your money for 6 months to 5 years, but I personally do not like to tie my money up for that long.

For a good read, pick up 'The Richest Man in Babylon' by George S. Clason. It is a detailed description on how to save money. It is also where I learned to pay myself first.