Why You Should Start Saving

Many Americans don't have a savings account. According to a study by the Commerce Department Americans spend all the money they have.

Your savings account is your safety net, in case you get sick or lose your job. You can use your savings to hold you for a few months until your situation improves. Your savings account should be separate from your checking, money market or investment accounts and should only be used for emergencies such as an unexpected expense, unemployment, medical bills, etc. Some of the main reasons Americans file for bankruptcy or go into debt is due to medical bills or lack of a savings account.

A saving account should have enough money to pay your bills for at least 9 to 12 months. The money should be readily accessible and stored in a high interest account, preferably an online savings account such as Emigrant Direct, HSBC, ING or a money market account where you can make money while saving money.

Write down all your monthly bills and expenses and the amount spent for each. Calculate the total. Use this amount and multiple by 9 or 12 to determine the total amount you need to save in your savings account.

Start by contributing small amounts to your savings account until you are able to contribute more. Start off with a contribution of at least $20 a month towards your savings account. Once you are able to contribute more do so.

Once you have reached your savings account goal start developing long-term goals such as planning for retirement. A great site to learn about retirement planning is www.morningstar.com and look under the Personal Finance section. Here are 8 easy ways to save money.

1. Saving coins in a jar – the money saved can be put in a high interest online savings account such as Emigrant Direct, ING Orange Account or HSBC

2. Using coupons especially during sales - the money saved can be put into a savings account

3. Use automatic deductions – sometimes it is easier for people to save money if they can't touch it or see it

4. If you buy a cup of Starbucks coffee at $4 a day and invest in with an annual rate of 10% you could have over $500,000 in 40 years

5. Get a free checking account and save up to $144 a year

6. Get a lower interest rate on your credit cards and save up to $422 a year

7. Save up to $400 a year on eating out by going to restaurants that offer coupons or specials or inexpensive dishes

8. Selling or donating unused items (clothes, shoes, toys, coats, purses, etc.) can save up to $1,000 a year