Save, save, save!  The message is getting through, we all know we should be saving, but when there are so many things to spend your money on, how can you, how do you save?  There is even a Department of Defense-wide campaign dedicated to helping the military community save – the Military Saves Campaign.  You can take a pledge to save, identify a goal, and they will help you on your way with tools, advice, and tips.  To get you started, here are three easy steps to help you commit to routine savings.  But, first, don't think about the past.  Concentrate on the future!
 

  1. Pay yourself first.  If you are like me, you have heard this phrase before.  But what does it actually mean?  It means you should set up an automatic payment either through allotment or an auto transfer at your bank for a specified amount to go into a savings account.  It is best to set up the transfer to automatically withdraw on payday, so the 1st or 15th of the month (or both).  That way you will always pay yourself first.  Start with a small deposit each pay period and then forget about it.  Pretend you don't have it.  Increase it over time.   
  2. Set goal(s).  It is important to know what you are saving for.  Saving for the sake of saving doesn't really seem like fun to anyone.  You want to ear-mark it for something.  And in-fact, according to research, making a plan for your money, like setting goals, can help you reach your goals 50% more effectively!  
  3. What to save for. Three categories can help you organize your savings goals.  Immediate, mid-term, and long-term savings.  
    • Immediate Savings (0-12 months): start an emergency or rainy day fund.  This will help you deal with unexpected expenses like paying an insurance deductible for your car or an airline ticket for an unexpected trip home.  And, if you have automated your deposits into your emergency account, see step 1, then when you need to withdraw from it you will also replenish it because you are continuously adding to it.  Keep this up (always) and increase your monthly deposit amount with raises and promotions.  You will want to keep your emergency savings in a regular savings account that you can access quickly, if needed.  
    • Mid-term Savings (1-5 years): save for a consumer product (like a laptop, tablet, TV, gaming system, etc.), vacation, education, car, home, or down payment on a car or home.  Mid-term savings is for a longer term goal.  Something you would like, but not a necessity, and that you cannot afford to buy with your regular monthly pay.  This could be saved in a certificate of deposit (CD) or money market account.  Check with your bank for terms and interest rates for these types of products to maximize your returns.  
    • Long-term Savings (time frame depends on your age and retirement plans): start a retirement account.  For Service members the Traditional or Roth Thrift Savings Plan (TSP) may be a great place to start.  TSP has very low administrative fees and it's easy!  TSP has target-date retirement funds called L (Lifecycle) Funds that can give you a good launching point for retirement savings.  Remember: you should not tap into this account until you are at least 55 years old – the penalties and taxes will take a huge chunk out of your earnings.  
    If you are reading this and are nodding to yourself “yes, I have done these things” I applaud you, and I hope you will challenge yourself to save more and keep up the good work.  Whether you were nodding “yes”, or need to work on your savings strategies, you can also check out this great saver checklist which goes beyond these three tips to make sure you are on-track.  Although, this blog did not discuss debt management, it is an important part of savings.