Give yourself credit: Save something!

In June, the U.S. savings rate — the percentage of income Americans save — fell to zero.

Nothing. We don’t save a dime — on average.

It’s the lowest savings rate since the Depression.

This article also says that more than 40% of all women don’t even have $500 saved. For those age 25-34 (my demographic … for another 33 days), it’s 55% with less than $500 in the bank.

A few suggestions I follow:

  • Plan ahead for expenses. One problem I used to fall into was having to charge an unexpected expense, then repay it. But you know what? Many “unexpected” expenses aren’t really a surprise. For instance, my daughter goes to a private school, and her tuition is due in a couple weeks. Now I divide our annual amount (rounded up) by 12 and save that much each month. I’ve entered it as a bill in Quicken and I pay it (and make the transfer to the savings account) monthly. I recently started saving another piece to pay for summer camps — which made a real dent in our finances this spring. Similarly, we all know certain costs are coming up: Insurance, taxes, 30,000-mile maintenance on the car, new roofs (or in our case, driveways). Make the choice to budget for these expenses — it is truly a relief to simply write a check with no worries.
  • Make it automatic. Do automatic transfers when you can. I started doing the “dollar a day” savings last month. Wow! Since the end of June, my account has an extra $42, and I didn’t feel a thing. ING Direct pulls the money into my account every week. After a few months, I’ll start investing it in a retirement fund, and voila! Savings.
  • Get an emergency fund. Start with something small. $1,000. If you can’t do that, a few hundred. Use it when you need to. Know you have money for groceries/gas/the phone, no matter what. Add to it at any opportunity.
  • Don’t pass up benefits. If your company matches retirement contributions, by all means, contribute. If you don’t, you’re saying “no thanks” to part of your paycheck.

So do yourself a favor – save something.

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