Effective Saving - Practices Made Easy

It is easy to postpone start to save for a later day, but a solid plan is key to success.  By following some basic guidelines from Mountain America Credit Union you're more likely to achieve financial security.

1. Make saving a habit.  Use automated transfers to get in the habit of saving. Money can be transferred from your account without you seeing it, which makes you less likely to miss it. 
2. Save 10% of your paycheck. The general rule of thumb is to save about 10% of each paycheck. If that seems too high, try 5% and work your way up to saving 10% of your earnings. Add 1% every year you get a raise until you reach 10%
3. Know yourself. Examine your goals to determine which savings plan will work best for you.  For example, don't invest all your money in an aggressive stock or mutual fund if you're conservative with your money,.
4. See the benefit of compound interest. The simplest way you can invest your money is to leave it alone and let it compound over time. You earn interest not only on what you save, but also on the dividends generated. The earlier and more you save, the more your money will grow.
5. Use dollar-cost average. This is the process of routinely investing a set amount of money over time, rather than all in one lump sum. It's a convenient savings method, particularly for beginning investors. For example, each month transfer $25 to $50 from your share draft account directly into an investment vehicle such as a traditional or Roth IRA. You reduce your overall risk from mark fluctuations because your money buys more share when the price of a share is down and fewer shares when the price is up.