Set up a budget that’s realistic and will allow you to follow it consistently
Make a budget that can absorb the unexpected. A budget is a work in progress. Your financial situation will constantly change and if your budget has the flexibility to accommodate plenty of variables you can save, pay off debt and invest to make your money grow.
Track your expenses. Log all of your expenses for a month so that you’ll know where your money is going. You can use an App or pen and paper but account for everything.
Allocate about 10% of your income for savings. Better to do a direct deposit so that you won’t be tempted to spend.
Be patient and consistent. Depositing $100 per month means you've saved $48,000 after 40 years. Assuming a seven percent annualized rate of return, your $100 per month deposit would equal more than $260,000.
Long-term savings should go toward a 401(k). Aim for maximizing your 401(k) deposits.
Apply about 35% of your savings to housing and utilities.
Put aside another 10% if you have specific goals in mind, such as buying a new car or paying for you child’s college education.
Cut back on unnecessary spending. Rent a movie instead of going to the theater. Drop your land phone line. Don’t sign up for cable TV services you don’t need.
Use the remainder of your income in whatever way you see fit. Food, entertainment, vacations etc