2 Smart

Saving is one of the most beneficial things you can do to plan for the future. For those that save money on a regular basis, you can find that it is much easier than you think to save for college, buy a home or a large purchase such as a dream vacation. Unfortunately, saving is not easy to do and requires discipline, but if you want to save money, here are two smart and easy ways to do so. Save Money Using a 401K Account One of the easiest and most effective ways to save money is through an employer s 401K account. With a 401K account, you can have your employer deduct a set amount from your paycheck during each pay cycle. The good news is that you receive your paycheck with the amount already deducted- this ensures that the amount is saved each pay period. Once deducted, you have the option of investing the money in stocks, bonds, mutual funds, money market accounts, etc. So not only are you able to save a specific amount of money each pay period, but your money will hopefully grow. Another great feature regarding 401K accounts is that when money is deducted from your paycheck it is deducted without tax. Taxes are not paid upfront, only when you cash out your 401K account. This means you can save money that is normally taxed, invest it, and reap the benefits of growth, all before having to pay taxes on it. Save Money by Paying Yourself First If you are self employed or your employer doesn t offer a 401K plan, one strategy to make sure you save money is to pay yourself first. Just like you will always find the money to pay off the electric bill, you should always pay yourself first. Come up with a percentage or a set amount each pay check such as $50 per paycheck or 10% of the net and in a few short months, you will be amazed at how much you were able to save. To increase the effectiveness of this strategy, try to place your saved money in a savings account where it will grow with the help of a compound interest rate. Saving as little as 5% of your paycheck can leave you with a small fortune of several hundred dollars to a couple of thousand dollars at the end of the year. Connie Barker is the owner of several financial websites dealing with Bad Credit Loans and Personal Loans .