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Dear Ash Cash,

Why should you save money and secondly How can you

save money?

The answer to Why should you save money is very simple… Think about

the future! Those who fail to plan also plan to fail. Saving money is

important so that you can be prepared for any of the emergencies and

obstacles that life may throw in your way. It is also important to

save because at some point after working so hard you are going to have

to retire. You want to make sure that when you retire you have money

saved so that you can continue to live the lifestyle you want to live.

lastly you want to have money available to make some of the big

purchases like a down payment on a house or buying a car, etc;

To the question of How to save money? I say treat yourself like the

IRS. When you work a 9-5, the IRS automatically takes whatever your

tax rate is out of your paycheck before you see it. You have to treat

yourself this way, so every time you get paid make sure you put aside

10% of your money into an account. The best and most effective way to

develop this habit is to make it as painless as possible. There is a

saying ³out of sight, out of mind² ­ if you make it automatic and make

it invisible, you will create the habit without it even disrupting

your day to day life. If you receive money via direct deposit, take

out your savings before you receive it, you¹ll never know it¹s

missing. If you receive income in the form of a check, then have

automatic deductions come out of your bank account on a monthly basis.

In order to avoid the temptation of using the funds for everyday

purchases, you should open a separate bank account at an institution

other than the one you keep your primary account in. I suggest a high

interest savings account at a bank like ING Direct or FNBO Direct.

Because these banks have little or no physical branches, it limits the

access to your account, making it easier for you to save, while

receiving a reasonable interest rate.