1) Sock some money away. Okay this one seems obvious, and it is. But if it is so obvious, why do most people ignore it?



Well, the truth is that life is expensive and problems or emergency situations arise that drain our bank accounts.

It doesn't matter how little you decide to put away for the future. For young people, the biggest factor on your side is time.

Small amounts of money add up over time, and if you factor in compound interest, the twenty bucks a paycheck you put away can turn into a nice chunk of money.

A smart and easy thing to do, if you have direct deposit through your work, is to have some money automatically diverted from your paycheck into a savings account.

2) Pay off your credit card debt. The interest rate on credit cards can be up to 22%. That means if you carry $100.00 on a bill over into the next month, you will now owe the credit card company $122.00. In that situation, you would have lost yourself $22.00.

No matter how much those credit card commercials claim they can improve your life and make it more enjoyable, the credit card company is not your friend. They want your money. So pay down your debt as soon as you can and before you put money in savings.

If you are paying 15 percent interest on a bill to a credit card company and at the same time are only earning a 3 percent return on money in your savings account, it makes sense to pay off your debt first. The amount you owe will easily eclipse what you are earning.

If whatever interest you earn is less than the 15 percent I use as an example, then whatever you are earning is not really earnings. Your net profit will still be negative. Get rid of credit card debt so you can start really saving money.

3) Use your credit card wisely. A credit card is essentially a card that allows you to take a loan out of a fixed amount of money, your credit limit. Credit cards are also a good way to build up your credit. If you have a record of paying off your credit card bill in full and on time every month, then your credit score should get better.

Another advantage of paying off the bill in full and on time is that you will be able to avoid paying any interest on the money you borrowed. If you pay attention and are careful with how you use your credit card, then it can be a good tool to help improve your credit.

Try putting one purchase a month on a credit card and paying the bill on time consistently. Some credit card companies even offer incentive programs like airline miles or cash back on certain purchases.

The credit card I use credits me a certain percent of all the money I spend at certain gas stations each month. Getting money back is even better than saving money.

4) Okay, here's another obvious one. Control your spending. Live below your means. Do not spend more than you make. Smaller expenses like going out to eat or to the movies can add up quickly when put on a credit card.

Try making your own coffee in the morning instead of going to Starbucks to get your buzz. Or make your own coffee several days a week and reward yourself with that Latte on Friday. Maybe carpool to work a couple days a week to save money on gas.

I am not claiming that eliminating these minor costs will make you rich, but it is important to understand how all the smaller expenses add up. And they do add up. It is important to think about what you do with your money and make choices on how you spend it.

People often feel burdened by their lack of money and feel that they spend it before they have it. Most of us spend everything we have. Just when we've managed to save a little bit of money, we want to buy new clothes, or take a trip somewhere.

It is not easy to save money, but is well worth it. Thinking about where your money is going and making a few minor adjustments can help you save.