what is the best way to save money and watch it grow?

Well, for college, a 529 college savings plan would be a good start. A Coverdell savings account would be good too. For emergency money, look into money market mutual funds and money market accounts. Very liquid and easily accessible. Good luck.

To me, it appears that you have 3 different goals and, while you didn't specify, I'm going to assume that you are only willing to subject yourself to a low-to-moderate risk, meaning you would like to be pretty certain that you don't loose a lot of the money in the investment. I see the college fund as long term (meaning you can support more risk and, therefore, invest in something with a slightly better return), the house as mid-term, and the emergency fund as short.

For long-term, invest in a mutual fund. This is a fund, managed by a broker, which invests in multiple assets for you, diversifying your risk. You can invest directly in the index like Dow Jones and S&P if you want. Since this is a college fund, look at an educational IRA. This allows you some tax benefits when you use the money for college. The IRA is more of a structure that allows you to invest the money in almost whatever you want. As a balance, you might also consider purchasing some treasury bonds or savings bonds.

For mid-length, bonds and/or some CDs (certificates of deposit) may be useful. CD's can also be used short-term. For emergencies, I recommend that you go with a money market which is just an interest bearing account and the money is always accessible.

So, in addition to the educational IRA, I suggest you just deposit some money into a money market. Set a limit for emergency (say, $1000) and whenever the emergency fund has $1500 in it, take $500 and purchase a CD.

Note that CDs usually have about a 1-year minimum maturity before you can get your money back (with interest). If you're willing to do a little more management, one approach is to split the CD up into multiples that are staggered. For instance, instead of buying 1 CD worth $1500, buy 3, each worth $500, and bought 4 months apart. That way, every four months, you know you have access to at least $500 if the emergency fund becomes depleted.

I suggest you look at "low" or "no-load" funds like Vanguard. You can set up a direct deposit if you want and they offer a pretty wide range of investment options. The "negative" is you can't get investment advice like at a large brokerage firm, their investments may be somewhat limited, and you might have to pay a small fee until your total investment balance goes over a set amount. The "positive" is that you pay less in fees overall, especially for transactions, and are thus likely to make more in the long-run if you have your own investment strategy.

Wow, there is like 400 answers to this question. Hopefully I don't duplicate...

First, ignore anyone who said to put money in a jar or a regular savings account. There are some great banks that offer online savings accounts. I use emigrant direct, which offers an APY of 4.75%. Not bad considering that the account is free, and super easy to use and transfer money back and forth to my regular bank account. I use this account for emergency funds, I ususally keep between $500-$1,000 in it.

For longer term savings I would suggest an index fund that yields between 10%-15% a year.

You can start an investing account through Scottrade, they are easy and economical. To open an account, you need to start with a minimum of $500, then each trade you make costs $7.00.

The best saving plan though is a 401K if you have one through your job. They will let you use the money toward a downpayment with no penalties.

A great resource I have found on personal finance is a blog called I will teach you to be rich. I'm including links below to everything I have referenced. Good luck!

Money market accounts are good if you're skeptical about investing. It's basically like a savings account, only with a higher interest rate.

Also, you should look into a 529 College Savings Plan. You may find that you will get a better deal by using a state different from your own, and you can either do it yourself, or get a financial adviser to help you.

Something else that is really easy for college savings is Upromise. Upromise works together with most states' 529 plans and all you have to do is register your credit card. Then a certain amount of any purchases you make on that credit card from participating retailers will go to the 529. It's not a lot at first, but since you will be building on this account for years, you can end up with a respectable sum of money by the time your son enters college.

Congratulations on the new baby!

First I would start by contributing the maximum amount my employer will match in a 401k . Most employers will match up to 6%, but I would recommend a minimum contribution of 10% of your gross salary. Some of the money you have in a 401k can be used towards the downpayment of a first home.

As for the babys'college fund, I would start with a 529 plan or an equivalent. With the college plan you would put away a small amount monthly in one of these plans and your child would be guaranteed tuition for a State University of their choice. There is a drawback though, the money can only be used for college. It cannot be cashed in. If your child does not attend, you or a family member can use the money for college. Please look into the laws of the plan in your state to confirm.

For emergency/savings money, what I do is have a minimum of 10% taken out of my paycheck weekly and deposited to an account for which I have no bank card. I have access to the account only by going to the bank during business hours and making a withdrawal. I further allow that money to grow into at least $1000.00 and then I would open a Certificate of Deposit. After having 2 six month CDs I would continue my savings and after each CD would mature i would add another $500 to $1000 to that CD and look it back up for another 6 months. The CDs will have staggered maturity date so that you will be able to save enough money to add to it when one of them matures. If you can, try to use a Credit Union for this kind of savings. Credit Unions have some of the better rates,are non profit and geared towards individual consumers than other commercial banks.

Write down where your money goes for a week or two and then analyze. People are often stunned to realize that the $5 they spend on coffee every day adds up to $250 a year. And do you really need 500 cable channels? And what if you only went out to eat once a week for dinner or if you started bringing really good and healthy lunches to work. Are you using that gym membership? (OK, I will quit sounding like a parent now).

I have saved money for vacations by putting all of my change in a jar. It usually adds up to a few hundred a year. Get a piggy bank!

Most people can come up with $1000 dollars a year without too much trouble. The problem is leaving it alone. Once you get $500 or so, invest in a CD or savings bond so that you will not be able to get to the money easily. Less tempting that way. Then, if you need the money, you can cash them in, otherwise you can time them to come due at your son's high school graduation.

Good luck, and that is a fabulous goal!

The most important way to save money and watch it grow is to decide how to spend your money. It is really very simple.....always question whether you need something, how you want to live and how to conserve when you make that decision, in other words, go through everything in your life and decide whether or not this is how you like your money, either hard earned or inherited, to disappear from your hands.

Then, you take the best option possible for you in terms of investing, whether it be safe, or a little risky, (and do your homework) and follow the plan without touching your money. We have always found that money you can't touch becomes money that you don't even realize is yours and it is now safe. Money for essentials is put in a interest bearing checking account and used only for the expenses that your hard decisions provided for. Through the years, you will be faced with other choices, depending on gov't programs, interest rates, etc that will help you decide further what to do with your invested money...good luck and be firm....it is not that hard.....providing you don't WANT a lot of THINGS!!!

Remember that old saying? Save up some money for a rainy day? Well, If you can take your bills, add some money for groceries, and a little for emergency, and Put the rest of the money you earn each weak into a bank account. You will literally Save up some money and watch it GROW! Also try investment. one month when your doing GREAT at work, Take some of that extra money and invest in something That is making LOADS of money! Like Apple, Dell, Ford..... etc.

And in no time ( particularly 9 months ) You will have enough extra money to give that child of yours a Fantastic Life!

My dear madam!!!

Money is not a plant or creeper to grow just by throwing like seeds. Money is a respectable, spiritual entity and you have got to go by certain principles and methodologies if you want it to multiply legally.

It needs a sincere, hard working, intelligent and strong minded person, where it can stay and grow.

It is good that you want to save now, just because you are likely to get a baby sooner.

So have a detailed work out of your income sources, your minimum needs and the possible amount that can be saved. The plan of savings like the Bank or other agency where you are thinking to deposit the period of deposit, the interest rates, and the flexibility of operations, and above all the genuineness of the organization where you are thinking to put all your money are important issues to ponder and decide.

I suggest a nationalized Bank for depositing, which works in the Government frame lines and hence safety for the savings is available.

It is necessary to streamline a way and give standing instructions to your Bank to divert the savings into the proposed deposit account at regular intervals.

So you need to work on all these points. Savings through Shares, investment etc yield more money, but risk factor also will be higher.

Hence you cannot as casual as you had made the question. It needs to be considered on high dedication and planning. I trust that you are now able to work out yourself rather than seek answers from us.

Your question needs to be answered in two parts.

First lets tackle saving for your baby's college costs. Each state has what is called a 529 college savings plan. You can contact your state for details and an application or you can contact a licensed financial adviser that will do the work for you. Most plans allow you to put money away any time or make automatic monthly deposits into it from your bank checking or savings account.

Saving money for a house or for extra savings which I like to call " A Rainy Day Account" requires more information from you like your age, tax bracket etc. A licensed financial adviser would be able to help with setting up an investment strategy that is liquid and at the same time has good growth potential. I would use an adviser you can trust.

Congratulations on your new baby !!! My wife and I are really happy with our new baby born July 9.

I can't determine how much you know about money or saving so some of this may be old news, but here goes.

Managing money is not easy. But the best friend you'll have in doing so is a monthly budget, whereby you have allocated money into categories before it is actually earned or spent. This lets you keep track of the dollars and pennies because once you've gone thru the process, you see where money has leaked out of the budget. Budgeting also lets you allocate on paper how much you can save for each of your wishes.

Dave Ramsey has a great book The Total MOney Makeover that I read and like. It says to start with a written budget and an emergency fund FIRST. $1000 set aside. From there you can pay off debt, save for college, a house, and he puts these steps clearly & easy-to-understand.

I suggest you check out his style at www.daveramsey.com

Good Luck