The Wall Street Journal recently reported that close to 75 percent of Americans live paycheck to paycheck, and do not regularly save for emergencies or retirement.
This inattention to savings is dangerous for anyone, but when you and your loved-ones depend on profits from your farm, ranch, or other family-owned business, regularly saving money is even more crucial because living paycheck to paycheck isn’t always an option.
Perhaps even more disturbing than the Wall Street Journal statistic is the recent report that – for the first time since The Great Depression – the average person is actually in negative savings territory. This means that whatever amount we have in savings, we have even more debt.
As alarming as these numbers are, they can be reversed when we develop an unwavering commitment to the science of saving early and saving often.
First of all, it’s important to get in the routine of saving all the time, not just when you have extra funds on hand. One misconception is that only those with an above-average income can afford to save money on a regular basis. The reality is when periodic expenses arise, you can’t afford not to have adequate savings.

Two Tips for Saving
1.    Maximize your 401k contribution. Social Security is intended only to be an income supplement, so it’s important to take advantage of any retirement-savings plan that is offered. If your employer offers a 401k plan, contribute the maximum amount and find out how much your employer will match.
2.    Pay yourself first. Every time you deposit money, you can make arrangements with your bank to have a certain amount or percentage of the deposit (aim for 10 percent) placed into a savings account. You will be “paying yourself first” by putting money into savings before covering other expenses.

Creatively Saving
Though saving money is a straightforward concept, it may help you to think outside the box to pull it off. A couple of ideas include collecting a family “tax,” in which each family member deposits $1 a day into a piggy bank or designating denominations so that you set aside all your $10s and/or $20s into savings.
So once you establish yourself as a consistent saver, the temptation to spend a surplus (e.g. tax refund, bonus, or raise) won’t be as great. And regardless of what you do with extra cash, you should have a strategy. One thing that is not very strategic is to increase your cost of living by taking on a higher car payment, eating out more often, etc. Reducing high-interest debt is always a good idea because these debts have a snowball effect and become more difficult to pay off over time.
If you receive a raise or are anticipating extra income over time, it is wise to revise your budget. The first step is to prioritize your needs. If you don’t have any pressing needs or high-interest debt, you may want to put extra money in a savings or retirement account.
It is really a matter of being disciplined enough to put something back each time. For example, if your monthly take-home pay is $2,000 and you put away 10 percent of that each month, you would manage to save $2,400 a year. Put that in an interest-bearing savings vehicle and it becomes even more.
Mary Catherine Harcourt is Credit Counseling of Arkansas' Director of Financial Systems.


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