Are you trying to sock away money with no specific goal in mind? Does it feel like you're getting nowhere? Even when you put money into a savings account on a regular basis, if you don't have it earmarked for a specific purpose, it will just feel like extra money. Is it "extra?" If not, you need to start setting savings goals.
You can set several savings goals at once, especially if the goals are long term. For short term goals, however, I've found that it's best to save for them one at a time. Short term savings goals are usually things like holiday gifts, vacations or a splurge item. Long term goals include saving for a down payment on a home or saving for retirement. But first thing's first – do you have an emergency fund? If not, that should be your first savings goal. A baby emergency fund of $1,000 is a good start, but ideally, you need 3-6 months of expenses saved for your family to be financially secure.
For long term savings, your best bet is to look into mutual funds to get the most return on your investment. If you're just saving for a few months to a year, look at a high yield savings account. Your emergency fund should be in an account you can access within 24 hours, so a local branch may be the smartest option for that savings goal.
Decide what you'd like to save for and create something visual to help you with your goal. Do you remember those thermometer type charts from grade school when you did fundraisers? Those are a good motivator. If you'd like something a little more adult-looking, create a bar graph or just pin up the amount saved and the goal somewhere that you'll see it often.
To ensure you put enough money away to reach your goal, choose a deadline to accomplish it. Next, decide if you're going to put money into savings weekly, biweekly or monthly. Divide the goal amount by the number of deposits you'll be making to get the amount you need to put away each pay period.
It sounds simple, but concrete goals are much more motivating than throwing money into a nameless account.
Photo courtesy tsmall via Flickr.
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