Take 'America Saves Week' to Heart

After four years of coping with a stagnant economy, probably the last thing you want to hear is how important it is to sock away money for a rainy day -- you already know that. But hear me out, just in case.

Those who struggle with long-term unemployment or under-employment often simply don't have spare cash available to save (although people can be remarkably resourceful, as you'll see below). Others, worn out by years of being frugal, just want to buy things again, as we saw during the recent blockbuster holiday shopping season.

• You could lose your job or see your hours or wages cut. Most financial experts recommend having six to nine months' income saved for emergencies, but even $500 gathered $10 a week could help bail you out of a sticky situation.
• Medical care, retirement and college tuition far outpace inflation. In fact the average college graduate now carries roughly $25,000 in outstanding loans -- debt that can't be discharged through bankruptcy and has no statute of limitations.
• If you're approaching or in retirement, your net worth has probably been hammered by plummeting home and retirement account values in recent years, so your cushion may not be as comfortable as you'd once hoped.
• Long-term funding for government-provided benefits like Social Security and Medicare is in doubt, so not only might tax rates rise in the future, but benefits will likely decrease or become more expensive, putting more of the onus on you to pay.
• Thanks to the power of compounding, money saved will grow exponentially faster the sooner you begin saving.
• If nothing else, you can teach your children good financial habits that will serve them well during hard times.

• A Personal Wealth Estimator that helps you calculate your current net worth and estimate your future net worth.
• A Weekly Blog from national financial experts on topics such as money management, investment basics, building wealth through home ownership, saving during tax time and getting out of debt.
• Inspirational Saver Stories from people like the Florida woman who started building an emergency fund by saving loose change, having small amounts automatically deducted from her paycheck, and learning how to cut back on impulse buying.
• Tips for saving money on everything from groceries to utilities to insurance premiums.
• Links to numerous websites offering financial education materials.

• Local banks offered low-fee savings accounts and higher-rate CDs to encourage new savers with small balances.
• Homeownership savings expos around the country.
• Free tax preparation assistance and credit counseling.
• Worldwide Military Saves drives to encourage savings by military families.

• Direct deposit part or all of your federal tax refund into a savings account or savings bond. (Check this IRS web page for details.)
• Avoid overdraft and late fees by regularly monitoring your bank and credit card accounts.
• Brown-bag it to work more often. If you saved $5 a week, you'd be half-way there.
• Kick bad habits. Smoking a pack of cigarettes a day might cost $2,000-plus a year.
• If you have low-deductible homeowners, renters or auto insurance, consider raising the deductible to $500 or $1,000. Many save 15 to 30 percent or more on their premiums.
• Visit Energy Star for tips on reducing home energy consumption. For example, each degree you lower your thermostat saves up to 3 percent on your heating bill.
• If you get a raise, continue living on your old salary and either direct deposit the increase or use it to pay down interest-bearing debt.

For more budgeting ideas, see my previous blog, Feeling the Pinch? Try These Expense-Trimming Tips. And, if you need help creating a budget, see my blog, With Budgeting, Slow and Steady Wins the Race.

Saving can be a tough habit to start, but once you're hooked, you'll never go back.

This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.

To participate in a free, online Financial Literacy and Education Summit on April 23, 2012, go to Practical Money Skills.