To save, pay yourself first

June 08, 2007|by LYNN LITTLE

"Pay yourself first."

That old advice is still good advice.

Saving is an important piece of building your financial security.

Consider savings as a fixed expense similar to the rent, mortgage or utility bill. Put away some money before you do anything else with your paycheck.

Saving is often difficult to do, so here are some tips to help make saving a habit:

· Make saving automatic. Opt for direct deposit, so your paycheck or other income is deposited directly into your checking and savings account or is transferred monthly into a savings tool.

· If your employer offers payroll savings, enroll.

· If your employer offers such tax-saving accounts as a flexible-spending account for medical expenses, enroll.

· If your employer offers to match retirement savings, take advantage of the gift! Matched saving is one of the best tools for achieving optimum long-term benefits.

· Save windfall income. The theory is simple. You got along without the tax refund or gift, so why not save it? A similar tip is to save monthly loan payments after a loan is repaid.

Once in the habit of saving and seeing account balances grow, saving becomes easier. Set both short- and long-term savings goals and work toward them.

Check out savings tools, financial planning calculators and information pages at www.choosetosave.org. You also can find more information on savings and other financial topics at www.mymoney.gov.

If you would like a savings plan worksheet, send a self-addressed, stamped (41 cents) business envelope to Maryland Cooperative Extension - Washington County Office, 7303 Sharpsburg Pike, Boonsboro, MD 21713. Mark the envelope, "Savings."

Lynn Little is a family and consumer sciences educator with University of Maryland Cooperative Extension in Washington County.

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