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While working in the financial services industry, I have met two distinct types of people. There are those who can’t seem to get past living paycheck to paycheck (and trust me I’ve seen them at all income levels, so more money doesn’t necessary solve the problem), and there are people who have extra money at the end of the month, but don’t know what to do with it. No matter where you are on the path to financial security, the following steps should help you get there.

1. Determine your priorities. Take some time and sit down with your spouse, if you have one, and talk about what excites you financially. Do you want to enjoy a long, fun-filled retirement? Do you want to help your kids pay for their education? Do you want to go on yearly vacations? What is it? Once you have decided, you’re ready for the next step.

2. Visualize your goal. Own it. This is your goal, so own it. Put up reminders, whether in the form of a collage, a computer background, or whatever. Make sure you don’t lose sight of your vision. Create a timeline of when you want to reach that goal. Remember to be realistic. If your goal isn’t attainable, it will be far too easy to become discouraged and quit. Once you have your goal in mind and have created an environment to work toward it, move on to step 3.

3. Evaluate your spending. Determine how much you are currently saving and then determine how much you are spending on things outside your necessary expenses. Is there a balance? Does it favor too far one way or the other? Pinpoint those areas where you can cut unnecessary costs, but remember the importance of living in the present, as well. Have some fun, but be careful that it isn’t at the expense of your goals. Determine how much you can save and how much you want to spend on other things.

4. Budget your savings. One way to make sure you are saving each month is to turn it into a bill. You can create an automatic transfer every month from your checking account to your savings account. Once the money is moved, it’s no longer accessible for everyday purchases. Do this even if the amount you save is small. At this point, it’s more about creating good behaviors than it is about making a huge impact. Trust me, you’ll thank yourself later.

5. Give your savings different names. If you have different goals (retirement, education, trips, down payment, etc.), consider setting up different accounts for each goal. Separating your money rather than having a large conglomerate sum can help you avoid dipping into it for other things, thinking that there should be enough for everything.

Remember, when it comes to saving money, it’s often more of a behavior problem than it is a money problem. Everyone is different, so everyone will have different goals and different ways to get there. By following these steps, you can create the necessary behaviors to reach your goals.



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