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Janice France-Pettit: Tips for the art of successful saving

Union Bank

Posted: February 26, 2011 1:55 a.m.
Updated: February 26, 2011 1:55 a.m.
 

Financial experts agree that saving should be a part of every household budget; unfortunately many Americans aren’t prepared for financial emergencies, nor are they saving enough for retirement.

Like most skills, saving money gets easier with commitment and practice. Just as an artist hones his skill to master an art, consumers can develop their skills and creativity to master the art of saving. 

In recognition of America Saves Week (Feb. 20-27), a national initiative in which Union Bank and other organizations encourage and assist Americans to save and build wealth, we offer the following tips to help build your savings.

Establish savings
Get in the habit of systematically setting aside a portion of your paycheck into savings before you begin paying monthly bills and making discretionary purchases. If possible, set up an automatic transfer from your paycheck into a savings or investment account. With less money available in your checking account, you’ll be more mindful of what you are spending.

If your employer offers a matching contribution to your 401(k) account, be sure to take full advantage of that benefit.

Develop a budget
For a few months, keep track of every expense, including small fees such as out-of-network ATM fees or late fees. It might surprise you how much these expenses can add up.

Look closely at your income and spending habits and establish a budget to provide you with a plan to save more and pay down debt. As you pay off debt, you’ll have more money to put into savings that will earn interest, instead of charging you interest.

Cut back on expenses
Take a close look at your monthly expenses and find ways to reduce them. 

Reduce heating and electricity bills by lowering your thermostat, taking shorter showers or switching to energy-efficient light bulbs. Save more by making meals at home instead of eating out or getting take-out, making your own coffee and packing your own lunch to bring to work.

Consider whether you need both a land line and cell phone and look into bundling cable, phone and internet services to see if you can find a monthly savings.

Get creative and sock away extra money in a savings or investment account.

Take advantage of interest
Tap into the power of compound interest — interest earned not only on your original investment, but also on its accrued earnings. Regular investments into savings and investment accounts early on can lead to future wealth.

Janice France-Pettit is a senior vice president and regional manager for Union Bank, overseeing the Simi Valley, Santa Clarita Valley, San Fernando Valley and Antelope Valley region. The foregoing article is general information about saving and is not considered financial or tax advice from Union Bank. Please consult your financial or tax advisor. France-Pettit’s column represents her own views, and not necessarily those of The Signal.

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