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By Diane Lochner
MoneyMix Contributor

You know that feeling in the pit of your stomach when you check the mailbox, hoping that it’s not full of bills? Wouldn’t it be great not to be scared of your mail? If you’re like me, you’ve had that feeling, and it’s not fun.

i know i should save, but how?

How do you get over mailbox paranoia? Let’s look at the basics of saving money; and we’ll start at the beginning.

The first step is to think about your goals. What do you want to do three months from now, a year from now, or even longer? You don’t have to write anything down—there won’t be a quiz later—but seeing it on paper can’t hurt.

Here's an example:

amount of time

your goals

In 3 months or less

  • A week at the beach (I’ll need a new swimsuit, for sure)
  • Concert Tickets

3-to-12 months

  • A new laptop
  • My sister’s wedding (airfare, gifts)
  • Holiday presents

More than a year

  • A better car
  • My own apartment (rent, utilities)

Once you’ve done some brainstorming on your goals, take a long, hard look at your expenses. Check out the Easy Budget page right here at MoneyMix – you can put in your income, things that you have to pay, and things you choose to pay. It’ll do the adding for you, and you can easily see if you’re within your budget or in the hole.

Wondering where all your money goes?

You use your debit card all the time, right? Another way to itemize your purchases is by going online with your credit union.

You can look up your debit card purchases online and print out say, 30 days' worth of transactions. Presto! You've got a great list of what you spent, and where.

atm fees add up fast

How much are you spending on ATM fees each month just for the privilege of taking out your money?

Avoid those pesky fees by using your debit card when shopping, and choosing the cash-back option at the cash register.

You can also avoid fees by only using your credit union's ATMs. As a member you typically won't be charged fees for using your credit union's cash machine to withdraw money.

small changes

You probably can't change your fixed expenses very much, unless you want more roommates or you cancel your cell phone or internet service. But you can make small changes that can really add up—fast.

Do you go out for lunch every day? What if you brought lunch from home one or two days a week?

Do you buy clothes or books at full price? How about waiting for a sale at the mall, or finding a good used book store or your town library?

 66 ways to reduce spending

 More on saving & compound interest

 Calculate compound interest

Based on your own lifestyle, you probably have dozens of small things you could do that could add up to serious savings.

ready? set.... go!

Now that you've got your goals in mind, checked out Easy Budget, and see how small changes can add up, try putting your savings plan into action for a month or so.

It's like putting yourself on a money diet - it takes work, and a little willpower, but the results feel great. When the month is up, how did you do? Were you able to cut back on some things, and put those savings towards your beach vacation?

If not, don't despair. Change like this doesn't need to happen overnight. Try it again, looking for ideas you might have missed the first time.

savings 101

Get this: banks and credit unions will pay you to give them your money. They pay you in the form of interest, which is what your money earns while it's in your account.

Savings accounts keep your money secure, yet easy for you to access. Most savings accounts pay interest or dividends.

Look for higher interest rates when saving (when borrowing, look for low rates). Feel free to shop around for a good rate - after all, it's your money!

Have you heard about the "magic of compound interest?" It's not magic, but it is pretty exciting. When the money in your savings account earns interest, that new money is added to your account balance, and the interest is calculated on the new amount, and so on. The rate of return from compound interest is reflected in what is called Annual Percentage Yield (APY).

It's compound interest that helps your money grow faster. Interest may be compounded daily, monthly, quarterly, semi-annually, or annually.

it pays to save

No matter what amount you can afford to save each month, it adds up. Here are examples at 3% APY. Interest rates can vary based on many factors, including type of account and the economy. Check with your financial institution for current rates.


1 Year

5 Years

10 Years

$25 per month




$50 per month




$100 per month




Once you're comfortable with your savings and checking accounts, you might start to look at other options, like certificates of deposit, or money market accounts.

But first, let's focus on getting you started. Your credit union and MoneyMix have everything you need to save successfully. We'll help you reach those goals, and put an end to mailbox-phobia!

Published August 19, 2009

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