From the Virginia Society of Certified Public Accountants - Presented by Dean Knepper, CPA, CFP®


(December 21, 2004) — Is this the year you make good on your promise to boost the amount of money you save? There are plenty of ways to achieve this goal, but the key is to establish a savings plan and stay committed to it. Here are some simple savings strategies recommended by the Virginia Society of CPAs.

Establish a goal

The key to saving is to have a goal. Whether it’s a comfortable retirement, your child’s college education, or a new car, when striving toward something specific, you’re more likely to reach your target. Be sure to set a dollar amount and a time frame and stick to it.

Spend less

Systematically reducing your spending will increase the amount you have available to save. If you don’t know where your money goes, tracking spending can help. Then look for ways to cut back and free up extra money for savings.

Pay yourself first

People have a tendency to pay all their bills first and save whatever is left over. The trouble is there is seldom anything remaining. Next month, before you pay the electric bill, buy a new outfit, or enjoy dinner at your favorite restaurant, “pay” a pre-determined amount to your savings account.

Make it automatic

A good way to put saving first is to arrange for your employer to automatically deduct a certain sum from your paycheck and deposit it directly to a savings or investment account. Another option is to establish an account with a mutual fund and arrange for an automatic transfer from your checking or savings account into the fund. The old adage, what you don’t see, you can’t spend, works well.

Bank your raise

Next time you get a raise, before you get used to living on a higher salary, put in place a plan for directing the extra money to your savings program. Follow the same strategy for any bonuses you receive from your employer.

Keep making payments

When you finish paying off a large loan or a major expense, such as a car or your child’s college tuition bill, keep making the payments — only now direct them to your savings or investment account.

Bank your refund

If you’re expecting a refund check from the IRS, avoid the temptation to spend it by having it deposited directly to your savings account. Better yet, adjust your W-4 statement so you don’t get a big tax refund. Save the “raise” in your paycheck via an automatic saving plan.

Bank “extra” paychecks

Depending on whether you get paid weekly or bi-weekly, you probably set up your budget based on getting two or four paychecks a month. Several times a year, when there’s an extra paycheck in the month, direct the entire check to your savings account.

Contribute the maximum to your 401(k)

If you participate in an employer-sponsored retirement plan, try increasing your contribution by 1 or 2 percent. You probably won’t miss the money and if your contribution qualifies for an employer match, you’ll be getting more “free” money. If your company doesn’t offer a qualified retirement plan, set up and contribute to an IRA instead.

Deposit found money

Whether it’s a birthday gift of cash, a dividend check, or an insurance reimbursement, banking unexpected windfalls builds your savings account balance.

Pay yourself back

If you’re forced to dip into your savings for an emergency, treat it as a loan. Set up a repayment schedule for paying the borrowed sum back as quickly as possible.

Work with a financial professional

A CPA [and CERTIFIED FINANCIAL PLANNER™ professional] can provide you with expert advice on saving more money and planning your financial future.


The Virginia Society of CPAs is the leading professional association dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. Founded in 1909, the Society has nearly 8,000 members who work in public accounting, industry, government and education. This Money Management column and other financial news articles can be found in the Press Room on the VSCPA Web site at


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