Saving money is not a common habit and many people have to really work hard to ensure that they are saving as much as they intend.  This is especially true for those who live under a tight budget and do not have much flexibility when it comes to saving.  There are some habits that are easy to implement that will help you stay on track with your savings and making these habits regular will help you improve your financial future.

Use Auto-Deductions

The widespread use of computers and the internet has made it easier than ever for individuals to automate their deductions from their checking account to their savings account.  The amount that is transferred can be set at any amount the account holder desires and the amount can be adjusted at any time simply by logging on to the account online and changing the information.  Auto-deducting your savings from your checking account is a good habit to get into because it allows you to save without having to think about it.

Aim For A 10% Savings Rate

You should be saving at least 10% of your income for emergencies and large expenses that will need to be purchased in the future.  Although this can seem like a significant amount to individuals that are living paycheck to paycheck, these savings can easily be realized by examining your finances and finding one or two routine purchases to eliminate from your monthly spending.  Having 10% of your income going into your savings account on a regular basis will help your savings grow quickly and provide you with a nice cushion against emergencies.

Pretend Your Savings Do Not Exist

Your savings account will never grow if you keep making withdrawals from it and spending the money on things that you probably do not need.  Money should enter your savings account easily and automatically, but should go through a long and careful review process before any money is removed from the account.  The best way to make sure that your savings will grow is to leave the money in your savings account alone and allow the interest to accumulate over time.

Many people are struggling with debt and are worried about being able to pay for higher education.  Being able to go to a university and earn a degree is becoming an important part of today’s job market and a higher education will be even more important for obtaining a job when younger generations enter the job market.  A college education is the first step to have all the tools that are needed to succeed in this job market.  Being able to save for higher education can go a long way towards giving yourself or your child an advantage in life.

Saving Methods

There are a number of different ways that can be used for saving for a university education.  One of the most popular ways to save is to put money into a 529 College Savings Plan.  Once enrollment has been assured, the money that has been placed into the savings plan can be used to pay for tuition to the university.  The rules of the 529 College Savings Plan dictate how the money may be used and any limitations are disclosed before investment in the plan begins.

Another saving option is interest bearing savings accounts.  These accounts are popular because the money saved earns interest, increasing the amount in the account that can be used for higher education.  Many of these savings accounts have a low rate of return because of the level of risk associated with savings accounts, but the money saved in these accounts can be accessed at any time and can be used to pay for whatever it is needed for, including food, books, or dormitory furnishings. 

People without a lot of disposable income can still save for higher education.  Placing $25 per month into a savings account can help with a head start on their future that will be greatly appreciated.  When it is time to apply, applying for scholarships may pay for a portion of the tuition costs and the student may be able to supplement the funds by working part-time. Having savings in reserve will ensure that the student has enough financial backing to pay for their education until they receive their degree.

This is a guest post by Car Finance 247 who are based in the UK and specialise in helping people with bad credit.

Having an emergency savings account can be very important to your financial stability as the money saved in this account is typically used for financial emergencies in place of taking out a loan or using a credit card.  Unexpected expenses arise all of the time and it is best to be prepared with an adequate emergency savings account to avoid any unpleasant surprises or the inability to take care of an emergency situation.  With a few tips and a little bit of time, you can be well on your way to having an adequate emergency savings account.

Calculate Your Expenses

The first step in starting an emergency savings account is calculating your expenses so you will know how much money you will need to keep in the account.  The easiest way to calculate your expenses is to take your major expenses from the previous month and add them together to see how much was spent.  After you have made a reasonable calculation of your expenses, multiply the number by 6 to calculate the six months of savings that should always be in your emergency savings account.

Open A Separate Savings Account

The biggest mistake that anyone can make with emergency savings is placing the savings into an account that is accessed for other reasons.  If the money is placed in an account that is accessed frequently, it increases the chances that the money marked for saving will be spent on other items.  It is important to open a separate savings account that will not be accessed except in the event of a financial emergency.  As most banks offer free accounts, it should not cost you anything to open a separate account.

Set Up A Recurring Deposit

Many employers will now allow employees to deposit their paychecks in up to three separate bank accounts to make it easier for employees to manage their money.  This is great because you can set up a recurring deposit for your emergency savings account for a set amount of money each payday.  Having these funds deposited directly into the bank account from your company’s payroll department reduces the chances that you will spend the money instead of saving it for emergencies.  The amount deposited can be a percentage of your paycheck or a specific dollar amount.

Leave The Account Alone

The most important part of starting an emergency savings account is actually saving the money for an emergency.  Once the savings goal has been reached, the savings account should remain untouched unless there is an emergency that cannot be handled any other way, such as the loss of a job, a serious illness, or emergency repairs to a crucial part of your home or vehicle.  After all, that is why the money has been saved.

Free savings accounts do still exist.  A free savings account should be a standard feature offered by your financial institution.  A savings account is a specific account that is maintained by a bank or other financial institution. It is set up for the purpose of saving money not spending it.  Savings accounts also entitle the owner of the account to earn interest from this account.  The amount of interest earned is based on the amount that is in the account.  A savings account is different than a checking account in that the money in the savings account is not to be used for routine spending such as that of a checking account.  A savings account is set up to encourage the account holder to save and earn interest based on those savings.

The good news is that most financial institutions, especially traditional banks, offer free savings accounts.  Beware that even though they are advertised as free,  there are usually some stipulations or potential fees that go along with an account; even a free one.  There may be fees associated with the account down the line if you fail to adhere to the rules and regulations that govern the account.

Typically opening up a savings account at any financial institution requires a certain minimum amount to open the account.  Even though the account itself may be free, charges may apply if you do not maintain a certain amount in your account. To open up a savings account and make the minimum deposit requires little more than signing on the dotted line and making your first deposit.

The following points can offer some guidance to finding and locating the best free savings account.

• If you currently have a bank or credit union that you do business with, the best option is to start there.  Many times the relationship you have with an existing financial institution allows you some perks and benefits that are not often offered to the general public.

• Talk with your lender about what you are looking for from your savings account.  You want to get the best return from your money.

• If you are starting from scratch to locate a free savings account, start by calling around to banks or look online to shop for free savings accounts.  Once you have located two or three options, start making calls to talk with the lender about what these accounts entail and what you may need from a savings account.

• Ask if there are fees and costs associated with opening and maintaining the savings account.  Be sure to ask about any hidden or less than obvious rules or stipulations to maintain this account.

• Research and compare the interest rates, amount of investment necessary to avoid the opening fee and the penalties associated with withdrawing funds from the savings account.

• Identify the best account for yourself and arrange to save the amount of money necessary for the initial deposit.  When you are searching for a free savings account, ensure that you read the fine print to avoid unnecessary costs that may be incurred down the line.  Speaking with a representative is the best way to ensure that you are getting the best account for your needs.  Saving for a home is different than saving for a vacation.  You want to ensure that you are getting the best return rates for an account that meets your specific needs.

Many people believe that searching endlessly for a small percentage increase in a savings account of some sort, or a bank CD, is the key to building up your wealth in a significant manner. This is unfortunately not true, and depending on your income bracket, isn’t worth the time doing so.

When I mention not being worth your time, by that I mean when people move their money in and out of accounts as soon as a better deal arises, making it a time-consuming effort to track all the changes, as well as making the new deposit and transaction.

By far the most important part of any savings strategy is to make a simple plan, work the plan, and make few adjustments along the way.

This breaks down to finding the best interest rate and looking at the fee structure which could eat into your capital if you don’t manage your account well.

Once you find a solid interest rate, then it’s a matter of working your plan over and over again on a monthly basis. That usually means putting money faithfully into an account to build up a financial safety net, and/or build up a nest egg for retirement.

Just like people who think they’re players in the stock market when they attempt to time the market and in fact, make it look like “they’re a player in the stock market.” In other words, they are trying to impress people, not really build their wealth.

The truth is the majority of savings and other investing strategies should be fairly boring, with nothing much happening over a period of time, other than general fluctuation which don’t mean that much one way or another.

As far as the time factor, if you’re not making some serious money when you spend time transferring funds to a new account because of a better interest rate or introductory offer, it’s just not worth the time. You would need many thousands of dollars to justify it, and even then it would have to be significant enough to pay you for the time you’re spending doing it. Only you can determine if it’s worth it or not.

I’m not saying there won’t be an occasional time to do this, but it should be a higer enough rate to make a difference in your savings, and of course there shouldn’t be any fees for early withdrawal or some other penalty if you’re hunting for the highest interest rates at all times.

When it comes right down to it, consistency concerning making your deposits over a long period of time will outperform those moving in and out of the market, no matter what the investment is.

An even stronger benefit is the mindset you’re developing which will be your strongest financial asset as you work the best ways to build your wealth within your risk tolerance. Sticking to a well thought out plan is by far the best and safest way to save and build up your capital.

Now that economic reality has hit many of us, and we’re scrambling for places to put our money which offer good interest rates and rewards, banks and financial institutions like U.S. Bancorp are responding to the new trend of cutting back on spending and putting more of our money into savings.

To that end U.S. Banccorp is offering an incentive of $50 in the form of a Visa gift card for customers to deposit a minimum of $1,000 into a special savings account created for that purpose. Another part of the deal is customers must agree to transfer funds to their savings from their checking account on a monthly basis.

Customers who participate in the savings account with U.S. Bancorp, which launches in December 2009, will also receive another $50 if they maintain a balance of at least $1,000 for a twelve-month period.

This is of course a great deal. No matter what the actual interest rates offered in the program are, you already receive a 10 percent return on your money guaranteed if you keep the $1,000 in the account for a year. Not bad at all. Add to that the interest you get and it’s a super deal in these difficult times, even if the 10 percent is offered in the form of two $50 gift cards.

Another good service being offered to help us save by U.S. Bancorp, along with other banks, it to give customers the option of having an automatic transer fo $1 from their checking to their savings each time they use their debit card; a very good service for those who have trouble putting money away for savings, or always forget about it.

This is a win/win for everyone involved, as consumers want to put away more money, and offering reward programs is a good incentive to get people to participate in that. Automating the process is also another proven method to help us save, and that should be a great service to offer while consumers continue to focus on the need to build up a nest egg to financially defend against the tough economic conditons that exist now, and in preparation for the long haul and the uncertainty concerning keeping a job will continue for some time.

Keep your eyes open for deals like the one offered by U.S. Bancorp, as not only does it help you build up a good nest egg to protect in times of trouble, but pays you a significant amount that is definitely worth the time and effort to take advantage of.

WTDirect is among the top five percent of U.S. banks for savings rates, and they even give you a chance to test drive the account with no risk to yourself.

At the time of this writing, opening a savings account with WTDirect gives you a return of 1.66 APY for the first two months no matter how much you put in the account to begin with. Once that two-month period is over, you then must maintain a minimum of $10,000 in the account to get the highest savings rate.

That’s a nice feature because a number of banks bring down the interest rate in a savings account as the account gets bigger.

There is also no restrictions on needing have a checking account with the company in order to have a savings account with a higher interest rate. Another nice feature is there is no minimum amount needed to open or maintain an account, and no fees regardless of how much money you have in it.

Also included is the current FDIC guarantee of up to $250,000 for your savings. As with all U.S. FDIC-guaranteed accounts, that will revert back to $100,000 as of January 1, 2014.

What’s nice about this for savers, depending on how you like to do your banking business, is this is one of those built-in savings accounts which can work good for those not concerned over moving their money in and out of an account. For two months you can get a good return with no minimum amount in the account, and no fees.

And if you like your experience, and have $10,000 available, you can always just keep your money in the WTDirect savings account if you choose to in order to get the higher interest rate.

You are also allowed to transfer any of your funds between your WTDirect savings account and other financial institutions you use; something not all banks allow.

With the names sounding so similar, a money market account and a money market fund can be confusing at times to many people, and considered a different name for the same investment vehicle, when in reality they’re very different in spite of similar sounding names.

For a money market account, this is a savings account banks or credit unions will offer to their customers, where the difference is it’ll have a higher interest rate based on higher minimum balance requirements than a passbook savings account would, which usually has no minimum balance requirements.

A money market account’s funds will also be backed up by the Federal Deposit Insurance Corporation (FDIC), for up to $250,000 at this time, which could be brought back down to the normal $100,000, once the temporary higher protection may be lifted.

Another element of the money market account is you can only make up to six withdrawals a month, and in some cases also have check writing privileges of three a month for the account. Fees can be applied if you go beyond the limitations of the terms of agreement, so they should be read and understood so you aren’t charged unnecessary fees.

If you belong to a credit union, your capital in a money market account would be protected by the National Credit Union Administration, which is also a federal agency.

A money market fund on the other hand is a mutual fund which invests in short-term securities like U.S.Treasuries, commercial paper and CDs, among a number of others.

Although a money market fund has no guarantees for you capital, they rarely fall below their net asset value, although a recent case happened when it did, when Lehman Brothers collapsed last year and people lost money in their money market fund accounts. This is extremely rare, but it can happen.

Of course the slightly higher risk comes from slightly better returns.

Either one of these accounts should be used to place your backup capital for emergencies, where you can get almost immediate access to your money.

The trade-off between the two is a little less interest with absolute guarantee for your money in a money market bank account, while the money market fund will normally give you a better return with a little more risk, and no guarantee of your money.

After declaring bankruptcy, GMAC has re-branded itself as Ally bank, and in efforts to generate new customers, is offering high yield savings account with a rate of 1.73 percent, and an APY of 1.75 percent, as of this writing.

There are several other features of the High Yield Savings Account at Ally Bank which also make it attractive:

• You can open an account with $0
• There are no minimum balances required
• Interest is compounded daily
• All accounts are insured by the FDIC
• No monthly fees

Do remember that the no monthly fees is based on usual practices. If you exceed 6 withdrawals or transfers within a statement cycle, you would be charged $10, and if a deposit item is returned, there is a $7.50 fee. Don’t be put off by the 6 withdrawal or transfer rule, that’s actually mandated by federal law, and all savings accounts have it.

But as far as minimum balances and normal use of the savings account, there are no hidden fees, which can give you peace of mind in contrast to other banks’ High Yield Savings Accounts which many times penalize if you drop below a required amount.

In contrast to most other large banks, this is a great interest rate and deal, as I couldn’t find a better savings rate for a no-minimum bank in America.

Several decades ago saving money was a bit more simple than it is today. At one time people simply worked to pay their bills and save money for ….well whatever. While it is certainly necessary to save money for any and all expenses, the strategy you use to save money can make the difference between financial security and just getting by. In today’s world it is not only recommended but almost necessary to have several different savings accounts to fund various expenses. You should have a well padded emergency fund, retirement savings and maybe even a rainy day fund. In addition to these standard savings accounts, you should also consider having an account for reoccurring expenses. Here is how to get started.

• Determine what reoccurring expenses you have- Most people budget for monthly expenses with “extra” money going into savings. Unfortunately we all have regular reoccurring expenses that we end up paying out of savings that could have been budgeted for throughout the year. Sit down and make a list of things like car insurance, homeowners insurance, taxes, annual vacations and gifts for special events such as birthdays, anniversaries and holidays. These expenses may come once a year, semi annually or quarterly.

• Make a plan- Once you know what reoccurring expenses you have including the amount and when they are due you can then determine how much money you have to set aside each month to cover these expenses. With that number in mind you now know how much you have to save each month in order to pay your reoccurring expenses when they are due.

• Open a separate account for reoccurring expenses- The whole point of saving for reoccurring expenses is to avoid using your other savings to cover the expense. With that in mind it is a good idea to open and maintain a separate account to avoid using this money for other expenses that pop up throughout the year. Many people find that online savings accounts are convenient for reoccurring expenses due to the convenience and availability of funds. You can easily set up a direct deposit into your savings account to avoid the hassle of manually depositing money (thus avoiding the temptation to use that money for other expenses) while reaping the benefits of a FDIC insured bank that offers a higher than normal interest rate. Many online savings accounts do not require a minimum deposit and while they are accessible they are not too accessible where you would have instant access to the cash should you want to use it for something else.

Some people may think that multiple savings accounts is simply a waste of time and requires more energy than it is worth to maintain. In reality by having separate accounts for specific goals you are better able to stay organized and track your progress to ensure you are on target for financial goals.