The Basics of Saving

October 16, 2012
by Lila Quintiliani, AFC®

Military Saves Assistant Coordinator

Saving money regularly can seem daunting at first, especially if it seems like you don’t have a great deal of money left over at the end of the month after all the bills have been paid.   Without savings, however, even the smallest mishap, such as an automobile repair, can become a major financial disaster.  So what is the best way to start?

Set a Goal
If you don’t already have one, an emergency fund of $500-$1000 is an absolute necessity, and a great first goal to have.  Once your fund is in place, paying down debt is a good progression from there.  Then you can look at other important goals, such as saving for retirement, a car, or a house.  You can set both short term and long term goals for yourself, just make sure they are specific, realistic, and have a definite time frame.

Make a Plan
In order to know how much you are able to save each month, you must have an idea of both how much income you have each month and what your expenses are.   Track your expenses for a few weeks, either by writing down your expenditures or saving your receipts.  Then you can take a few moments to complete a spending plan.  You should be setting aside an amount each pay period, whether it’s going toward your emergency fund, your credit card debt, or a cruise.  And the money should be going into an earmarked account, separate from your checking account.  You want the money to be liquid (so not in a CD or invested in antiques), but not too easily accessible.

Make it Automatic
The best way to build up your savings is to automate them.  Either set up an allotment that comes directly out of your pay, or have an amount transferred out of your checking account each month.  By “paying yourself” at the beginning of the month or the pay period, you take all the guesswork out of saving.  By putting the fund in a separate account, you take away some of the temptation to spend it.

If you feel that you still don’t have enough income to set aside for savings, then you will need to look at ways to cut back on expenses or increase your income.  But by mastering the basics of saving, you can set yourself up for future financial success.

You can save, we can help! has great information on the importance of saving, tips on cutting spending, and inspiration to help you achieve financial freedom.  Then take the Military Saves Pledge and visit Military Saves today.



Tip of the Day

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    Participate in the Thrift Savings Plan (TSP) - a retirement savings and investment plan for Federal employees and members of the Uniformed Services. It offers the same types of savings and tax benefits that many private corporations offer their employees under 401(k) plans. More info at

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