Kip Tips


How to Save More

Cameron Huddleston

During America Saves Week, take these steps to begin preparing for a brighter financial future.



The majority of Americans say they're not prepared financially for the future, according to a survey released February 24 to coincide with the start of America Saves Week. A big reason: Many of those surveyed haven't developed a savings plan with specific goals that would help them meet their long-term financial needs.

SEE ALSO: 10 Reasons You'll Never Be Rich

The survey -- in its seventh year -- was released by America Saves, a national campaign managed by the Consumer Federation of America and the American Savings Education Council, which was founded by the Employee Benefit Research Institute. Although one-third of the survey respondents say they're financially prepared for their future, one-third say they're not prepared even though they live within their means, and another one-third say they're struggling to live within their means. Only 40% of respondents -- down from 43% in 2013 and 46% in 2010 -- say they have a spending plan that allows for sufficient saving.

“As numerous studies have shown, those with a plan save much more effectively than those without one,” said Dallas Salisbury, EBRI CEO and president and chairman of ASEC, in a press release. The goal of America Saves Week is to promote good savings behavior. About 1,800 local, state and national organizations participate in the annual event to encourage people to start saving -- or saving more.

If you need help improving your savings habits, here are several tips from Kiplinger's and America Saves:

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Find more room in your budget to save. If you feel like you don't have enough cash at the end of each month to start saving (or to increase the amount you're currently saving), take a hard look at where you're money is going. Start by tracking your spending on a daily basis, even down to how much you paid for a cup of coffee. You can use pen and paper, software such as Quicken or a free budgeting Web site such as Mint.com to record everything on which you spend money. Chances are there are plenty of ways you can cut back. (See 28 Ways to Waste Your Money.) Once you eliminate unnecessary expenses, you'll have more cash to set aside in a savings or investment account.

Set goals. As Salisbury says, you'll have more success saving if you have realistic goals in mind. For starters, you need to build an emergency fund to pay for unexpected expenses without racking up debt or tapping your retirement account. Ideally, you should have enough cash in a liquid, interest-bearing account to cover six months' of living expenses. Here are seven ways to find enough money to build an emergency fund. For interest-bearing accounts that offer easy access to your money (as well as investments for longer-term savings) see Where to Keep Your Savings Now.

When saving for retirement, you need to know how much you should be setting aside each month to amass enough to cover your expenses when you're no longer working. Take our Are You Saving Enough? quiz and use our How Much Do You Need to Retire? calculator to see if you're on track. And see How to Retire Rich for advice on how much to save toward retirement at various ages. Or try the America Saves Week Assess Your Savings Plan tool to see if you're saving adequately and to create a plan.

Save automatically. Kiplinger's Personal Finance Editor Janet Bodnar says that "the trick to saving money is just that -- a trick." Most of us can't be trusted to pay ourselves first, so we need to have someone else do it for us. In other words, sign up for your employer's retirement plan and have contributions automatically deducted from your paycheck to build your nest egg. To build your emergency fund, save for a car or a down payment on a house, or reach any other savings goal, set up direct transfers to be made monthly from your checking account to your savings or investment account. Putting your savings on autopilot will help you avoid the temptation to spend that money and will make reaching your goals easier.



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