Live Well. Below Your Means.

How to Stay Disciplined with Your Savings

1. Gather all important financially-related documents and receipts to a central location. File them so you will be able to easily find the items you need in the future.
2. Consider a computer based financial program (like Money or Quicken) so you can keep track of every dime you spend – financial control equals power.
3. Spending every dime and more? Start by cutting back on a few items per week and putting away that money. Just say no to spending more than you have.
4. Ask for direct deposit at work if they offer it – you’re saving money, and you don’t even see it. A savings plan at work that pays you a “matching contribution” is the fastest way to save.
5. Minimize your reliance on credit cards. Force yourself to pay cash so that you can track your nickels and dimes. You will never have a late payment and you will never pay interest to others at the very high rates credit cards charge.

Top Saving Mistakes

1. Not modifying your spending habits and committing to save money.
2. Not taking advantage of your company’s match in a 401 (k) plan, or getting involved in a defined contribution plan.
3. Not appropriately/correctly allocating your assets to meet a specific goal or time horizon (diversification is important).
4. Not setting a specific dollar target or financial goal.
5. Not knowing how much you have, where you are spending your money, and how much you need to save for the future (failure to plan for retirement).
6. Cashing out your retirement plan – should roll over to an IRA or your new company’s retirement plan.

Pay Yourself First

This is a very important philosophy shared by all of us at DOCFCU. Consider this definition from Investopedia, a business unit of Forbes:

The phrase Pay Yourself First is commonly used in personal finance and retirement planning literature that means to automatically route your specified savings contribution from each paycheck at the time it is received. Because the savings contributions are automatically routed from each paycheck to your investment account, this process is said to be "paying yourself first", or before you begin paying your monthly living expenses and making discretionary purchases. This simple system is touted by many personal finance professionals and retirement planners as a very effective way of ensuring that individuals continue to make their chosen savings contributions month after month. It removes the temptation to skip a given month's contribution and the risk that funds will be spent before the contribution has been made.