The current recession has put a renewed focus on the importance of building household savings. Although even the most basic changes to consumers' behavior can have a positive impact on their financial health, there are five things nearly everyone can do to save more:- Treat saving like a monthly expense. Set aside a designated amount such as $250 or $500 per month and put it in a savings account at the same time as other bills are paid so the money is never missed. If possible, arrange an automatic monthly transfer between accounts to make saving even easier.Contribute the maximum amount to retirement accounts. If a matching program is available through your employer, contribute as much as possible to benefit from their program.
- Keep investing despite volatility in the market. Putting money in at regular intervals over a long period of time should help to generate more consistent returns than trying to guess which markets or sectors will be successful in the short-term.
- Plan ahead to make strategic decisions about when to begin collecting Social Security. For couples in particular, it may make sense for one partner to begin collecting benefits before the other. In addition, it's never too early to start planning the best ways to turn assets into income in the future.
- Create a budget. Although it may require some time initially, a detailed budget can be a very effective way to learn more about each monthly expense. Simply knowing where your paycheck goes each month can help you make better decisions about how to cut back or reallocate your spending.
--Bridget O'Sullivan
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