Right now is as good as a time as any to cultivate the habit of saving money that you earn. One of the foremost money saving strategies at our disposal is the habit of paying yourself first. There are many sophisticated ways to get this accomplished, and there are also very simple ways to see results towards your goals: the piggy bank method.
Essentially, you create three separate, but equal accounts to make 3 separate, but equal deposits into each of them. You will eventually open these accounts at a bank, but you want to start at home, and you can use 3 jars, envelopes, or as the title of this money saving method, you can use piggy banks. For ease of explaining, we will assume you are using 3 separate jars.
You will label the first "savings", and by depositing into this account, you are following one of the oldest money saving strategies known by paying yourself first. The second jar is labeled "investing", and this will keep you from just working for money, and will allow you to be in a position to have your money work for you, one of the money saving strategies and methods for wealth building. The 3rd jar will be labeled "Charity", and this account is going to help you create the habit of going the extra mile, establishing character in the process. If you ever need a helping hand, you can believe it will be there just as you have been there for others.
Now remember, a rule of thumb for your savings account is to pay yourself first, and that starts with at least 10%, but more if you can afford it. For your 3 jars, it is an ideal situation to put aside 10% for each account, but you should start with what you can afford and work with what you have. Your goal is to create the habit of putting aside savings for the future, and as always, the key here is consistency. At the end of each month, you should take the deposits from each of the 3 jars, and deposit them into their respective bank account.
Your savings account should yield you a high rate of interest, and it should just be for depositing only, and not withdrawals. Your investment account should continue to accumulate until you have found an investment that meets your criteria and is lucrative for these funds to be allocated to. You want the money from this account to work for you, and that means it should create more money. Your charitable account should be donated to a charity or fund that you feel strongly about, and this can be done at the end of each month, the end of the year, or how you see fit.
The money saving strategies of paying yourself first, having your money work for you, and going the extra mile with your charitable contributions cultivate the habit of saving, and also the habit of creating and sticking to a budget, an underlining theme with the piggy bank savings method. By allocating funds from your income to these accounts, you are budgeting to do so, and that takes discipline, desire, commitment, and action. Once you have this strategy in place, applaud yourself for you are securing your financial future and taking control of your money, and your life.
Source by Bryan Whitehead