Savings can be known as paying yourself.  It is money that you put in a savings account for future income, benefits or profits to meet long-term goals.  When you put your money into a savings account you earn interest on the money in your account.  So the earlier you save, the more interest you will earn.

There are two kinds of interest, Simple Interest and Compound Interest.  Simple Interest earns you money on the principle, the amount you deposit.  With Compound Interest, you earn money on the principle and any interest already earned on the principle.

Here are two ways to increase your savings:

Start Saving Money Early
Here’s an example of how starting to save at an early age really pays off!

Bob and Jane both save $1,000 per year ($83.33 per month or $19.22 per week) and earn 10% interest per year.  Jane starts at age 12 and stops at age 20.  Bob starts at age 20 and stops at age 55.  At age 55 Jane has invested $8,000 and now has $388,865 while Bob has invested $35,000 and only has $329,039.  Bob never caught up!

Decrease Expenses
Are your expenses more than your income?  Here are some things to think about:

• Try to cut any unnecessary spending
  • Eat out less
  • Cut back on expensive entertainment
  • Carpool
• Avoid impulse buys
• Look at your needs versus your wants
• Clip and use coupons
• Purchase generic products

See what it will take you to become a millionaire

See how much you can save by reducing your spending

See how much your savings will be worth

  
How long will it take you to double your money?  Find out with the Rule of 72.