In an April 10 Federal Trade Commission blog, Colleen Tressler, a FTC consumer education specialist, wrote “Now’s the time to start a savings plan.”
The author suggests the first step is to create a realistic personal budget to determine the amount of money available for savings.
A budget worksheet is available at www.consumer.ftc.gov/articles/pdf-1020-make-budget-worksheet.pdf.
Remember to “pay yourself first.” Treat yourself as if you were a personal creditor. A good way to do this is through the use of any available payroll savings plan at work.
The author emphasizes the importance of compounding interest. She writes: “It makes your investment grow at a faster rate than simple interest, which is interest earned only on your original investment.”
A key, the author stresses, is to keep the savings effort going.
Also, when you receive extra money, e.g., from a raise in your salary at work or after paying off a debt, save as much of the extra monthly funds as you can.
If it is hard to get around to making deposits to your savings, think about setting up automatic transfers from your checking account to your savings or investment account. The less effort spent getting funds into savings, the easier it can be to save.
For more information on saving money, go to www.ftc.gov.