One of the most effective tips to save money that anyone can offer is to create a consistent money-saving plan for every paycheck you receive. Putting aside twenty or thirty percent of your earnings immediately into your savings account will give you a basic amount of money saved every time you receive payment. Set a percentage as soon as possible and try to use the accumulating total only for emergencies.

Nowadays, many people praise the use of energy-saving light bulbs and other resource-conserving items. You can save money on your electric, gas, and water bill just by cutting down on how much of these resources you use. Switch to eco-friendly light-bulbs and heaters, and don’t forget to turn off the water and the lights when you don’t use them. Just by performing simple tasks like these will save you a surprising amount of money on your next bills.

Be sure to plan carefully at all times before making purchases. It is important to limit how many impulse buys you make if you want to save money in the long run. Consider the purchases of luxury items carefully and determine if it’s really a necessary buy to make. A little research goes a long way on purchases, especially ones that will cost you a significant amount of money.

One of the trickiest but necessary ways to save yourself money is to stay out of debt. By paying off any loans that you may have now (student loans or home mortgages) you will guarantee peace of mind for the future, where you won’t have to worry about the debt of those loans growing and eating away at your saved funds. Buying insurance and setting away money for use under the specific conditions the insurance provides is also a great way to save yourself money. Always prepare for the future now to not concern yourself with it later.

These are just some of the many ways you can save money. By keeping in mind these simple tips, you’re sure to see a growth in your bank account within the first few weeks.

A savings plan in the not too distant past was something most families were proud to have and often budgeted money each week to deposit into their accounts. Nowadays, with prices rising for just about every expense for living, savings is not a high priority, which is really a shame.

Why Are Savings Important?

As we mentioned, Social Security cannot be depended upon to care for us in our golden years. In fact, baby boomers and the generation that followed may see the last of this benefit of retirement. You will still need to eat, have a roof over your head and afford medical care when you retire, and you will have to consider how you are going to pay for these necessities of life.

Savings are not only important for the distant future, but the future that is just around the corner as well. Case in point: if you live from paycheck to paycheck and something catastrophic such as a medical emergency or getting laid off happens, what will you have to fall back on to pay your expenses until you are able to return to work?

How To Start Saving

Most people are under the assumption that investing in stocks and bonds is the way to prepare for their retirement years. That may be so, but before you can invest in the market, you need to have a decent sum of money that will pay you the dividends for which you are looking.

A great innovation in the corporate world was the utilization of a 401K plan. This is a plan where your employer deposits a certain percentage of your salary from each paycheck. You can often access this money if you need it in an emergency, but most people tend to leave the money in the plan so they will have a nice nest egg for which to plan their retirement.

If you don’t have access to a 401K plan, you may think of putting money in an IRA account. You will earn interest on the money and you will not be able to take it out just because you want to buy a new toy. The most important aspect of an IRA account is that when it matures, you should immediately roll it over for another specified period of time instead of taking the money and spending it.

Leave Room In Your Budget For Savings

Another way you can ensure that you have a financial cushion is to budget a specific amount each paycheck that is to go into a conventional savings account. Pay your savings account just as you would any other bill such as utilities, car insurance and credit card payments. Making savings a priority will see you through some tough times and allow you to slumber peacefully, secure in the knowledge that you are preparing for your future when you no longer work a full time job.

For us, it usually means rushing out at the last minute to find a gift. We don’t mind giving the gifts, but the reality is that the kids already have so many toys that each new one may only get a minute of attention before they move on to the next one. Possibly never to be touched again.

The kids enjoy the whole process, and that’s what it’s all about, but all in all it feels like kind of a waste. I’ve always felt that there was a better solution, but never gave it much thought except when heading out to find another toy to purchase and doom to its eventual fate of lonliness packed away in toy storage.

A while back, the solution came to me. We’ve always planned to open college savings plans for our children when that time comes, but we had never considered the possibility of doing the same thing for our nieces and nephews.

The more I considered this, the better the idea sounded. It was perfect in just about every way. Here’s some of the benefits I see:

There wont be anymore last minute trips to the store looking for gifts as deposits can simply be transfered from my bank account directly into their college savings account at anytime.

I will no longer feel like I am throwing my money away. Rather than filling their parents’ house with another unused toy, my money will go towards something valuable that I will feel good about.

I will be promoting something that I feel is important. A college education is an necessary step towards success for most people. As they say, the only thing more expensive than going to college is not going to college. Having this fund will help solidify college into their future plans.

They’ll need the money. College is expensive and getting more expensive at a ridiculous pace. I paid for all of my college expenses with savings and by working full time. How great would it have been if an uncle of mine had shown up with a couple thousand dollars to pay for my college? It will be great to be that uncle.

The kids wont miss a thing. Their grandparents already spoil them enough for the rest of us by themselves. The kids wont miss one less present. Sure, they aren’t too excited when we tell them what we are doing, but the appreciation will come later.

our state has a great plan. The plan for our state is consistently ranked as one of the top plans in the nation due to it’s low fees and plan options

There are no minimum deposits, minimum balances, or start up fees, so I don’t have to spend anymore money than I would anyway for birthday and Christmas presents.

It’ll be fun to track the progress. I’m in to that sort of thing, so it will be fun to report to them each year how much money they have in their account. It may even inspire them as far as their financial education is concerned.

As a bonus, there are tax benefits. The earnings are, of course, tax exempt at the federal and state level, but the money deposited into a 529 is also tax deductible at the state level.

For us it’s pretty much a win-win, and all it takes is a little admin time to get things set up. It’s probably something more people should consider.

You don’t have to read too many personal finance blogs to find examples of people who have had their rates for various services lowered just by calling and asking for it. So, I figures I would give it a try.

I called my cable company up and told them that I keep receiving offers in the mail from their competitor for a lower price and that I might be interested in switching if they couldn’t offer me a more competitive rate. The customer service representative that I was speaking with immediately told me that they were currently running a “promotion” where she could lower my bill to $33/month for the next year. I happily accepted.

It was a completely painless way to save $20/month for the next 12 months. I didn’t have to beg or threaten, which is a good thing, because while it’s true that I keep getting advertisements from their competitor, their service isn’t currently available in my neighborhood.

Emergency funds give you something to fall back on if you become ill or disabled and can’t work, if you or your spouse lose your job, incur large medical bills, or have an unexpected large bill such as a major car or home repair.

Most households ignore this oft-heard emergency fund advice:

* 43% of households have less than $1,000 in liquid savings, according to SMR Research, a market research company.
* 28% live literally paycheck to paycheck, an AC Nielsen poll found in August, with no savings whatsoever.
* Just three in 10 households have a cash hoard that would tide them over for a minimum of three months, according to Ohio University researchers.

I’m not convinced this is such a bad thing. Perhaps the whole idea that everyone needs a big pile of cash, and needs it right now, should be rethought.

What really counts is the resources you can command to help you withstand a crisis, even one that’s unexpectedly severe or long-lasting.

Consider what you have to give up in order to build your emergency fund. It makes no financial sense, for example, to have money sitting in a savings account earning 3% or 4% for years while you have credit card debt accumulating at double-digit rates.

And putting your retirement savings on hold while you save for emergencies could quite literally cost you a small fortune. Let’s assume you’re single, making $50,000 and that your company would match 50% of your 401(k) contributions, up to 6% of your salary. By not contributing 10% of your salary, you’re forever giving up $1,500 in free money (the match) plus paying an unnecessary $1,250 in extra income taxes each year (assuming you’re in the 25% federal bracket).

The biggest cost, though, is the future tax-deferred earnings you’ve forgone. Each year you don’t contribute, you’re costing yourself $65,000 in future retirement money (assuming your contributions, plus the match, grow at an 8% annual rate for 30 years).

Having a much smaller emergency fund, say one months worth of expenses, can be perfectly legitimate, as long as you can quickly get your hands on enough money when you need it.

Having some cash can help you enormously in the first days or weeks of your crisis, but having access to credit can tide you over the rest of the way. For most families, the best borrowing for emergencies comes in two forms: credit cards and home equity lines of credit (HELOC). They are readily accessible and relatively inexpensive to have and to use.

Of course, you’ll want to be extremely judicious about how you use your credit. Credit can be an incredibly helpful tool, but like any tool, it can be misused. In a crisis, you’ll need to cut your expenses to the bone before you do anything else.

You also need to realize that this advice isn’t for everybody. If you’re a chronic over spender who can’t be trusted with credit, you’re better off going the all-cash route. But, if you consider yourself financially sophisticated, you may be able to find better ways to have your money work for you rather than having it disappear inch by inch as taxes and inflation take their toll.

Most people should at least think about the alternatives to tide them over as they consider building a traditional emergency fund. Either way, hopefully you’ll never have to use your emergency funds, but if you do, you’ll be much happier if you have a plan.

At the core, Brown says there are two big myths. One is that Social Security is fine and won’t run out of money. The other is that personal accounts are a free lunch; they can save Social Security from going bankrupt as well as help Americans salt away enough money for a secure retirement. But those are just myths, says Brown.

Myth 1: Social Security is financially sound for decades to come

The Social Security Trust fund is projected to have sufficient resources to pay full retirement benefits through the year 2041. The truth, however, is that Social Security is not on solid footing for decades to come.

Baby boomers, some 77 million people, will start claiming benefits as early as 2008. And given that Social Security is a pay-as-you-go system, its cash-flow surpluses will start declining then.

“This pressure will necessitate significant changes to the Social Security system and/or the rest of the federal budget, possibly including spending cuts, tax hikes or increased borrowing,” he says. “To argue that we can ignore the problem for several decades simply because we have an accounting balance in the Trust Fund is fiscally and economically irresponsible.”

Myth 2: Personal accounts can save Social Security without benefit cuts or tax increases

The financial problem facing Social Security is simply this: you can’t sustain a pay-as-you-go system in the face of a declining worker-to-beneficiary ratio.

“The simple economic and mathematical reality is that there is no easy, cost-less or “pain-free” solution to the problem.”

Proponents of personal accounts have argued that if we divert existing tax revenue to personal accounts we can have a free lunch.

The only problem with this approach? “It is not true,” he says. “If it were possible to provide guaranteed benefits that are higher than today’s promised benefits with no tax increases, then every single Republican politician, economist and policy analyst, as well as most Democrats, would be falling over themselves in a rush to sign on.”

“Many policies alone or in combination make economic sense,” he says. But “we will need to fix the lion’s share of Social Security’s problems by reducing the rate of growth of benefits,” he says.

“We shouldn’t kick the problem down the road for 10 years for others to deal with it nor should we pursue policies that don’t fix the problem but appear to,” he says. “There are no easy solutions. Someone’s ox must be gored. We either need more revenue or to pay less out of the system. People either don’t understand that or they choose to ignore it.”

Even the optimistic projections on Social Security don’t have it around for the time when I retire. So, I’m hoping for changes and not expecting anything.

If you buy before the end of this October, you’ll be guaranteed the excellent return described above. If you wait until November, you might benefit from an increase in the fixed rate component of the I bond. The trade off to waiting is that you will no longer be able to enjoy the older 4.8% rates, and instead are betting on the inflation in the next 6 month period.

For more information on how I bond rates are determined and good discussion on whether you should buy now or wait, you may want to check out this thread.

Information on I bonds and purchasing them is available at Treasury Direct.

Would Robert Kiyosaki, author of Rich Dad Poor Dad, consider this to be a good thing? He concludes in his article that “savers are losers.”

Looking up at my rich dad I asked, “Does this mean money can be created out of thin air?” Nodding his head, my rich dad said, “Germany did it and now we are doing it.” “That’s why savers are losers,” he added.

In spite of all these increases in prices, the federal government’s economists say, “Inflation is low. It’s under control.” They are allowed to say that because the government is charged with only monitoring inflation in consumer prices — not asset prices.

The problem is our dollars return to the U.S. to buy our assets. In simple terms, we send cash overseas to buy goods, and overseas investors take our cash and use it to buy our assets. That’s why the Wal-Mart shopper finds bargains in the store but can’t afford to buy a house, gas, gold, or stocks.

In summary, investors shop for asset bargains, and consumers shop for consumer bargains and try hard to save money that is not really money. That is another reason why the rich are getting richer.

So, I guess the answer depends on what we’re spending our money on…