Get the Money Snowball Rolling
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Many college grads are starting jobs and receiving a real paycheck for the first time in their lives. However, many have no idea what to do with their money and find themselves wishing they knew how to properly save for future goals, pay off debt, and enjoy their hard-earned cash.
The first step to turning around one’s finances is starting. It’s sounds simple, but it’s incredibly difficult for a lot of people due to the amount of choices available. There are a million banks, savings rates, mutual funds, and asset allocation options available so how can anyone choose the best option?
They can’t.
Having too many choices prevents people from making any decision at all, and this is where a lot of young people find themselves with their money. It’s just sitting in a checking account where it’s not gaining interest, being spent on frivolous items, and never properly saved for the future.
What’s the best choice someone can make with their money? Start early. Starting early is the biggest secret to getting ahead with your finances. By creating a simple financial system you can make your money work for you and get back to enjoying life.
So how do you do it? How do you start saving your money instead of always coming up short, and putting off debt and savings for another month?
Make it simple.
- If you don’t have one, open a checking account. Go to your local bank and get the free checking account. Take your money from underneath your bed and deposit it into your checking account. It’s safe and insured up to $250,000. I really hope you don’t have more than $250,000 under your bed.
- Open an online savings account with ING, FNBO Direct, or HSBC. Online savings accounts provide higher interest rates than the big brick and mortar banks and allow you to transfer your money between your checking and savings accounts for free. This will allow you to separate your money and make saving easy. You can receive a free $25 from ING for signing up for their savings accounts and depositing $250; leave a comment below or e-mail me for a referral if you’re interested.
- Once you have the two separate accounts, link them. I use ING and they have a ‘My Links’ button. Follow the steps and then you’ll be able to easily transfer money between your checking and savings.
- Make it automatic. The great thing about online savings accounts is that you can automatically have them deduct a certain amount from your account every week, two weeks, every 15th and end of the month, or once a month. This makes the savings automatic and doesn’t require you to think about the process, or cheat your savings by spending the extra money in your checking account.
That’s it. We can get more technical later, but the four steps above will get your finances rolling in the right direction. Getting started and breaking bad habits is the hardest part of personal finance and luckily some simple tricks can make savings and money a whole lot easier.
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Hi, I'm Austin Morgan. I live in Japan, teach English, and write about personal finance. I hope you enjoy FF and feel free to 
[...] mentioned in the post Get the Money Snowball Rolling, that starting is the hardest part. By opening an online savings account at ING, FNBO, HSBC, or [...]