The hardest part of saving money is not spending it. I know that sounds pretty obvious, but it’s an obstacle we all have to overcome. So how do I avoid spending the money that I want to save? I make the saving automatic.

By setting up portions of my paycheck to automatically go into my retirement and savings accounts, I almost don’t even realize that the money is missing. It’s pretty hard to spend money when you don’t have easy access to it. This is the beauty of paying yourself first. It’s like spending money on your future self.

Here’s a quick overview of the system I have setup for my current situation. Since everyone is different, this system may not work for everybody, but hopefully, it gives you an idea of some of the options available out there.

Roth 401(k)

A 401(k) is the best example of automatic savings. You specify a percentage of each paycheck that is put directly into the account, and that’s it. I’m currently putting a small percentage of each paycheck into a Roth 401(k). While it’s not as much as I’d like to eventually save, the percentage I’m contributing is enough to get the maximum match from my employer.

Roth IRA

I used to have to mail in checks to contribute to my Roth IRA. This was the only option for the brokerage I held it through. Having to mail in a check left me with so many opportunities to change my mind in the process that I never ended up contributing as much as I planned.

Luckily, I got smarter and transferred my Roth IRA over to Vanguard. With Vanguard, I’ve setup an automatic investment plan which regularly takes money from my bank account and invests it in my Roth IRA. At the moment, I have this set up so that I’ll max out my contribution for the 2008 tax year.

Student Loan Payments

Unfortunately, I haven’t figured out a way to automate my monthly student loan payments. However, blogging about them five days a week serves as a pretty good reminder. Even though the payments aren’t automated, each month I transfer $834 into a high-yield savings account which I use to hold funds to pay back my student loans. This way the money is separated from my spending money, and I also earn a little interest while it sits there until I make the payment.

Here’s a simple way to make $25 in only a few minutes. Previously, I’ve written about why every college student should have a high-yield savings account and the benefits of opening a separate account. By opening a high-yield savings account at ING Direct, you’ll get a $25 bonus after 30 days if you deposit a minimum of $250. That’s a 10% return just for opening a free account.

About the $25 bonus:

• Use an active link from the list below to be eligible for the bonus
• Complete the application (no need to enter a promotional code, because the links have the promotional information built in)
• Fund the account with an initial deposit of at least $250 and leave it in the account for at least 30 days
• Disclosure: The $10 I get for referring you will go directly into my loan payback fund (my ING account is my payback fund)

After 30 days, you can withdraw some or all of your money, because there is no minimum balance requirement and no annual or monthly fees. Interest on your savings account is accrued daily, compounded monthly and credited to your available balance at the end of each month.

If everything sounds good, get your $25 by following these steps:

1. Click on one of the “ING $25 Bonus” links below
2. Read the terms and then click on the “Open now!” button
3. Verify that the link is still active. The new page should say:

“Start savings with a great rate. To receive your $25 bonus, open and fund your Orange Savings Account with at least a $250 initial deposit.”

If the top paragraph says anything else, then the link has been used, and you need to come back here and choose another one. If there are none left, leave a comment or contact me, and I’ll add more. I only have 25 referrals You only get 25 referrals per year, so I’ll keep posting links until I run out.

1. ING $25 Bonus (1 reader has earned $25!)
2. ING $25 Bonus (2 readers have earned $25!)
3. ING $25 Bonus (3 readers have earned $25!)
4. ING $25 Bonus (4 readers have earned $25!)
5. ING $25 Bonus (5 readers have earned $25!)
6. ING $25 Bonus (6 readers have earned $25!)
7. ING $25 Bonus (7 readers have earned $25!)
8. ING $25 Bonus (8 readers have earned $25!)
9. ING $25 Bonus (9 readers have earned $25!)
10. ING $25 Bonus (10 readers have earned $25!)
11. ING $25 Bonus (11 readers have earned $25!)
12. ING $25 Bonus (12 readers have earned $25!)
13. ING $25 Bonus (13 readers have earned $25!)
14. ING $25 Bonus (14 readers have earned $25!)
15. ING $25 Bonus (15 readers have earned $25!)
16. ING $25 Bonus (16 readers have earned $25!)
17. ING $25 Bonus (17 readers have earned $25!)
18. ING $25 Bonus (18 readers have earned $25!)
19. ING $25 Bonus (19 readers have earned $25!)
20. ING $25 Bonus (20 readers have earned $25!)
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25. ING $25 Bonus

Even though it can be a lot cheaper to cook for yourself than eat out, it’s also nice to relax, hang out with friends, and enjoy a meal at a restaurant every once in a while. Here are some tips on how I do it without breaking my budget.

Lunch instead of dinner. Lunch specials are cheaper than dinners, and breakfasts are usually even cheaper. If possible, I’ll meet up with my friends earlier in the day, we save some money, and it’s still just as fun!

Share. If you go to a restaurant with a significant other or friend, split a dinner and an appetizer between the two of you. At most restaurants this will be plenty of food for two people and cheaper than paying for two dinners.

Eat leftovers. Most restaurant portions are so huge these days that you can easily take home the leftovers and eat it as another meal. Two meals for the price of one!

Drink water. This one is simple. Water is free. Save and few bucks every time you eat out, and the savings add up quickly. If water is too bland, ask for a slice of lemon or lime for taste.

Wait for dessert. At most sit-down restaurants, desserts are a rip-off. Drop by the grocery store on the way home, pick up some ice cream, and make your own delicious concoction for only a fraction of the cost.

Do you like movies? I do. Do you like collecting them? Me too. That doesn’t mean we have to spend a fortune doing it though. With some awesome online sites and local stores, there’s no need to pay full price for DVDs ever again. Here’s a short guide on my favorite places to get cheap DVDs.

1. Amazon
One of the most popular places to buy DVDs online and my personal favorite to buy new DVDs. There are often many bargains to be found here — sales, discounts, etc.

2. eBay
Another obvious choice, and definitely the place to catch some really great deals on new and used movies.

3. Buy.com
I’m focusing on DVDs, but this store sells tons of other items at great prices too. The DVD section is top-notch, and the store’s prices are usually competitive with Amazon.

4. Half.com
Half.com is a branch of eBay, and it’s great for used DVDs. You can typically save at least 50% off the retail price on DVDs, and occasionally find good ones for only a couple of dollars.

5. Local Stores
Check out your local video stores for special deals. I lived near one that had a “Buy 2, Get The Third for $.01″ deal on used DVDs. Video stores that are closing down will often have good sales too.

What do you do with your loan money when you get it? Does it just sit in your checking account doing nothing until you spend it? That’s what mine did when I got it, but now I’m older and wiser. Here’s what I should have done.

I should have put my loan money into a high-yield savings account. It would have earned interest instead of just sitting in a checking account doing nothing. In my case, the interest I would have earned from a high-yield savings account could have covered most of the interest accruing on my student loans.

Of course, this will vary from case to case based on a number of factors:

• Are your loans subsidized or unsubsidized?
• What’s the interest rate on your loans?
• What’s the APY of the high-yield savings account?

In my case, I have $15,000 in subsidized loans and $5,000 in unsubsidized loans. Since my student loans are a few years old, I was able to consolidate them at a 3.0% interest rate. That’s lower than the APY of almost every high-yield savings account available. If I had put my loan money into a high-yield savings account, I would have been able to pay off the interest on my $5,000 unsubsidized loan without doing any extra work. Even though interest rates are higher on student loans now, you can still cover a good portion of any interest accruing on your loans by keeping your money in a high-yield savings account.

Students Without Loans
If you don’t have loans, you should still put your money in a high-yield savings account. If you don’t, you’re basically giving away free money. After getting a graduate assistantship, I no longer have to rely on student loans, but I have been putting my monthly stipend into a high-yield savings account. In fact, I put almost all of my income in my high-yield savings account and only move it to my checking account when I need to pay bills. After doing this for the past year and half, I’ve earned enough in interest to pay off the interest accruing on my $5,000 unsubsidized loan.

As I’ve mentioned before, I have an Orange Savings Account at ING Direct which currently has a 4.20% APY. Other high-yield savings accounts have a higher APY, but ING makes up for it with a great referral program. If you open an account with $250 or more with a referral from me, then YOU GET $25, and I only get $10. That’s right, you actually get more out of it than I do. If you’d like a referral or have any questions, let me know.