Learning to save money at an early age will be an invaluable lesson. By learning how to save money, and actually doing it, you will be able to reach your financial goals.  The best part? Save enough and you will be able to avoid taking on unnecessary debt.

Savings is something that many people know is important, but many Americans do not make it a priority.  As a young adult you have one of the best assets you could ask for: time!  You have more time to save money and let it compound and earn interest. Don't delay your savings plan and start as early as you can.

Your Savings Plan

Yet another plan we get to make.  You may have noticed that in personal finance, planning is stressed. A lot!  That is because planning today really does help you avoid issues in the future. Your savings plan is no different.

Like many things in life, a good savings plan starts with a goal. What is it that you are savings for?  A new car?  A special vacation?  A home?  No matter what, write down your goal so you have an objective to work towards.  Next, set a time frame for achieving your goal.  When do you want to have the funds to make your purchase? Determine how much time you have between today and your goal due date.  Break this into months and weeks.  Finally, do some quick calculations to determine how much you need to save each week and each month to reach your goal on time.  You now have a goal with a specific time frame and you know what you need to do each week and each month to reach it on time.

Pay Yourself First

You might wonder where this money is going to come from? You should treat your savings goal like your rent.  It is due each month, no excuses, and is factored into your budget (read about budgeting here) as an expense.  Your savings is so important that you should adopt a "Pay Myself First" mentality. This is the idea that you should pay yourself first, before your other bills are due.  Check with your bank, but lots of financial institutions will allow you to establish an automatic transfer so each month a predetermined amount is put in your savings account without any hassle.

Remember, Savings is Savings

This may seem like an odd statement, but people occasionally fall into a trap when they begin to accumulate a nice savings. This trap involves the individual thinking they have extra money for a special purchase, a vacation or to go out and eat more. Your savings should not be touched unless you have an emergency or you originally planned to make a purchase, such as a vehicle, with the money you are saving.

Your savings is just that: a savings. It's not for luxury items or wants. It is there to help you in a time of financial need. It will take some willpower to look at a nice balance in a savings account and not dip in every once and a while. When you begin making small exceptions and tapping into your savings it becomes easier to justify spending larger amount. One trick that I use to overcome this is, what I term, defining a personal zero. I set a certain savings goal, say $1,000. Once I achieve this goal then the amount becomes my new zero and I don't want to dip below this balance. I'll then set a new goal, say $1,500.

Whatever strategy works for you, be sure that you treat your savings as an account that isn't to be used unless it is necessary. Creating a list of reasons of why you may use your savings can help prevent unnecessary spending. Before you spend, check to see if your reason is on the list. If not, then you might need to reconsider why you are making the purchase.