Five Ways To Save Money Starting Today

The Commerce Department reports that Americans are not saving money to ensure their financial stability. As a nation, the savings rate was reported at minus 0.5 percent for the year in 2005. This is the first time a negative savings rate has been reported for an entire year since the 1930s.

If you have enough money in savings, it can protect you from the impact of financial hardships, such as those associated with job loss, illness or divorce. Even if you can only start by saving a little money at a time, you will see your account grow over time.

Consumer Credit Counseling Services (CCCS) agencies recommend five ways to start to save money right away:

• Set savings goals. This will help create the discipline you need to save money. Make a list of short-term goals, like a holiday spending account or a vacation. Then look at long-term goals, like college tuition, home ownership or retirement.
• Pay your savings account like you pay bills. After you've established your financial goals, see how much money you can afford to put away on a regular basis. By building regular savings into your budget, you are able to pay yourself first. When you get ready to pay your monthly bills, include a money savings bill every time.
• Be prepared for emergencies. Having an emergency savings fund of three to six months' worth of living expenses will create a cushion if you lose your job or face a medical crisis. It can be used when your car breaks down or the washing machine goes out.
• Put increases in the bank. When you get a tax return or a bonus, put part, if not all, of the increase in savings. To save money over time, your ultimate goal should be to put away 10 percent of your income each year.
• Save more with employee benefit plans and raises. If your company offers 401(k) or similar plan which offers an employer-match, save the maximum amount. By receiving the full benefit of employer-matched savings you will be increasing your future income while barely lifting a finger. Try to do the same if you receive a raise. Since you are now making more, you should be saving more as well so that you can better secure your financial future.