Simple Money Saving Tips

One of the best pieces of financial advice is to pay yourself first. After all, if you never even see the money in the first place, you won't miss it. Even if you only save a little at a time, the savings add up if you continue month after month. Whether you are saving for the long term such as retirement, a new home, or college or to fund a one-time splurge like that Coach handbag you've been eyeing, you can use a variety of tools and tricks to save more money relatively painlessly.

Automatic deductions - Set up regular, automatic deductions from either your paycheck to your savings account (if available from your employer) or from your checking account to savings. As time goes by, these systematic transfers add up. In addition, you will quickly become accustomed to the lesser amount of your paycheck. When you get a raise, consider increasing the amount you save. For example if you have $50 transferred from your paycheck to your savings account each week, by the end of the year, you will have saved over $3000.

Bill yourself - If automatic transfers or deductions aren't an option, bill yourself. That's right, use your computer and a printer and print out a series of twelve monthly bills for the amount you wish to save. Place one "invoice" for each month in the file you use for your monthly bills. As you sit down to pay your bills, write a check to yourself and deposit it into your savings account.

Sign up for free bill pay - many banks now offer free online bill paying. This saves both time and postage. Once you set up your payees, add yourself as a payee too. When paying bills, don't forget to pay yourself. At the very least, transfer what you would've paid in postage into your savings account.

Choose a higher yield bank account - If your savings is sitting in the standard savings account that's linked to your checking account, chances are it is earning minimal interest. Today, many online banks offer significantly higher interest rates. $3000 in a typical savings account that offers 1% interest would earn $30 after one year. An account offering 4.5% interest would generate $135 in interest after one year.

Take the free money - If your bank offers an incentive program such as Bank of America's Keep the Change program, enroll in it. This particular program helps you save by rounding up your purchases to the next dollar and transferring the change to your savings account. While you can do this yourself, the perk here is the matching funds. For the first few months that you are enrolled, the bank will match your savings!

Free checking - If you are still paying a monthly fee for your checking account, renegotiate or switch banks. Many banks offer free checking, while others will if you have your paycheck deposited directly. Use the savings to increase the amount you pay yourself.

Use sub-accounts to earmark your funds - If your bank allows it, you can set up multiple savings accounts and use these for individual savings goals. For example, ING Direct is one such bank that lets you do this. You could have one savings account earmarked for your annual property taxes, another for Christmas spending money, another for vacation, and another for emergencies. To top it off, ING Direct offers one of the highest interest rates you'll find.

Save your five dollar bills - Whenever you get a five dollar bill as change, place it in a special place such as a separate compartment in your wallet or purse, a coffee can, or a piggy bank. At the time, it's not a painful sacrifice. Over time, the five dollar bills add up.