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Parents: What is the best way to start saving money?

  • I asked this question in personal finance but got no response so I figured I'd try here: My husband and I have never been good at saving money. Right now we have no savings, we are just living off of his paychecks (I am a stay at home mom so we only have his income, however he does make a very good wage). We currently own our home but are looking for a bigger home. We will be moving into his parents rental home so we can sell our home and start saving towards a new home (we have horrible credit so we have to pay outright, no mortgage). The only debt we have is for my car which we are making payments on, other than that we have no credit cards or any other debt, we just have our monthly bills (electric, cable, cell phone, car insurance etc.) We are lucky that my husbands employer sets aside money in two different funds for him so we do have a start and can save some that way but we'd like to start saving from what he brings home as well so we can get into our new home quicker. I do have a savings account that this money can go into, it's just a matter of actually getting it into the back and not spending it. What is the best way to start and stay motivated about it?

  • Answer:

    have you written out a budget so you know where your money goes? If not that would be where you want to start. Write down everything and account for every cent - do this for a month and then look at how much you spend total on different things - you will likely find places you are overspending or things you don't realize you spend so much on. If doing it for a month is too hard then start with a week at a time. If you budget your money and follow the budget you will be in control of it - that means sit down and plan how you are going to spend. If done right it takes about 15 minutes a week to keep up. Maybe one session a little longer so you and your husband can map out the month together and agree on it. Your first goal should be to save 3-6 months (minimum) salary as an emergency fund in case you husband is injured or a car breaks down or whatever emergency might come up. Then If you don't have retirement or are not contributing to that put 10-15% of income to that. Then after you have that done start saving for your house, Kids college, or whatever else you want. The key is to tell your money where you want it to go by having a plan and following it. To stay motivated set realistic goals and track where you are in reaching them - celebrate little victories as well as big ones. The motivation of getting a new home would be plenty for me - maybe go house shopping when you get down to remind yourself what you are working towards.

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Direct deposit is the best way if it's available. You won't see the money so you won't even miss it. Just have a set amount deposited into an account each pay period.

Bella

The first thing that made the biggest deal was realizing how stupid tax refunds are. If you get a refund (other than the refundable credits) you can reduce your federal tax withholding and you will get more in your check each week, but when you file your taxes you will get a very small refund. To figure out how much you should have withheld, http://www.irs.gov/individuals/article/0,,id=96196,00.html *** If you choose to go this route, it is wise to check any time you have a change in your financial situation. If DH gets a raise or his hours get cut, change your withholding. If you have a kid, change your withholding, etc. Then I used direct deposit, multiple savings accounts and auto-transfers. I opened up a savings account for each of my goals and every pay day a certain amount of my paycheck goes into each savings account, the rest left in the checking account to pay bills.

Star is a chick

You treat it as a bill. It goes into the bank right way and you do it each and every pay day. Even if this week is short and you can only save a little you still put something in it. You do not touch it and you keep it up. You have to have some self control.

kim h

Have the money you want to save taken from the paycheck automatically, if possible. That is what we do. A percentage of our income is taken and put into savings IMMEDIATELY. We never see it. We never touch it. It is not considered a part of our income, and we budget everything based on what is left over. If you can't do that - then as soon as the paycheck arrives, immediately take out the amount you want to save and put it into savings. Forget that it exists. It is no longer a part of your income.

Allie Q

my husband and i got our taxes back, we opened a seperate account. we put $1000 in it to start and have money automatically transferred to it every 2 weeks when he gets his pay check. then, i told him that we are not going under a certain amount in our checking account that we use for bills, etc. unless we had more bills than normal. for example, we just got a new vehicle and his first paycheck of the month, we have over $800 in bills coming out, so thats what that extra money would be for if e doesnt get any overtime. you just have to put it in your head that you will NOT spend that money. if something came up, then where would you get the money from? look at it from that standpoint. also, i put us on a budget, we get $500 every two weeks for groceries, gas, lunch money for my husband, etc. make out a budget of what bills you have. I am also a stay at home mom. you could become a babysitter and put that extra money in a savings account. my budget: month HOuse vehicle gas electric water insurance school(for my son) cable phone. total. then i estimate his income and subtract the bills from income. say i have $800 left, i put $100 in another account and then $500 for us, the rest stays in our account.

mom to 3

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