Week #7-Start Saving

Okay, we all know that times are now extremely tight financially for everyone. In watching the news, we understand that this may just be the beginning of the financial crisis. We have a long way to go to recovery. And unfortunately most of us only have enough in our savings accounts to purchase movie tickets and 1 shared popcorn!(smile). This does not include your 401 or retirement account money.

So Week #7 is about starting to really build up your savings account. I know Suze Orman suggests we have an 8-month emergency fund, but lets just start with having a 2-week emergency fund and build from there.(lol)

I would suggest two types of Savings Accounts or Plans: An Emergency Fund Savings Plan and a Look-A-Head Savings Account:

The Emergency Fund:

1. This fund is not to be touched but in the case of a true emergency. When no other options are available.(ie, loss of employment, car breaks down, hot water tanks exploses!, etc...)

2. This account should not have an ATM/Debit card for easy access.

3. If married, both parties must agree prior to any withdrawals from this account.

4. No "borrowing" from this account until payday!

5. Decide how much money you are able to contribute each paycheck and stick to it. No excuses!

6. A great way is to establish a payroll deduction with your employer to have money automatically placed in this account each paycheck.

7. The amounts can be small (25.00) a paycheck, just start somewhere.

Look Ahead Savings Account

1. This account is to cover extra, planned expenses to avoid credit card use.

2. As a family plan a vacation for the summer, then decide how much money you will need to take the vacation. Then start saving!

3. Stay focused on the intent of the account. Do not start using for other items, unless agreed upon by all parties. Example: If you need new furniture for the guest bedroom, start saving now and buy the furniture with cash. You know every August school clothes will be needed, so this account can have $300.00 for new school clothes.

6. Decide how much money per paycheck you can place into this account and try to stick to it.

7. Even if you don't save all of the money needed, at least 1/2 of the money can be used to pay cash for a vacation, versus a full credit card vacation.

A good thing is to set a goal for your Emergency Fund Account. How much money do you want by the end of the year. Okay, so if you don't currently have a saving account, go today and open a savings account. Remember being consistent is key to saving money.

If you have other saving tips, please share.