Making a habit out of saving

For a lot of people, the last year or so has caused them to rethink the idea of personal saving. According to the U.S. Bureau of Economic Analysis, the personal savings rate for 2005 was -0.4%. That was the first time the savings rate in the U.S. had been below 0% since 1933. When the economy is doing well, the idea of needing a rainy day fund seems unnecessary; however, as we have seen not being prepared for a bad economy, can wreak havoc on a family.

Because of the renewed attention to savings, many families for the first time in years are prepared to handle minor emergencies without having to use a credit card or home equity loan. What about you? Are you saving for a rainy day? What about retirement? College?

Here are a few tips that might help you start saving or help you save more.

1. Direct Deposit – Use direct deposit to deposit a portion of your paycheck into your savings account.
2. Save Your Change – Put all of your spare change into a jar at the end of each day. All those pennies and nickles will add up over the period of a year.
3. Walk Away – When you see something that you think you just have to have, wait. Come back in a couple of days and see if the desire for the item is still there. Who knows, you may be able to find the same item for less.
4. Set a Goal – Often having a target or goal to aim for will help keep you motivated.
5. Use a Budget – The best way to begin saving is to know where your money is going. A budget will help you spend your money wisely and help prevent impulse purchases.