Have You Practiced Savings Money Today?

FOR IMMEDIATE RELEASE
June 5, 2009

How much money do you save? While it's true that some people save more and others less, overall the U.S. savings rate has been quite low. However, the personal saving rate for Americans reached a ten-year high of 4.2% in the first quarter of 2009, according to the Bureau of Economic Analysis. "I wonder," says Kathy Sweedler, University of Illinois Extension Educator, "what the long-term effect of the recession will be on personal savings?"

"I believe that practicing saving money makes us better savers," explains Sweedler. "Once we get in the habit of saving money then I think it's likely that people will continue to save." Financial professionals often recommend that households have an emergency savings fund that covers three to six months of essential costs. When you have an emergency savings account, then you don't have to use a credit card when you have an unexpected expense. Whether it's a car repair, an appliance repair, or less income that is the unexpected event, emergency savings can help.

If you're not in the habit of saving money, now is a great time to start! Remember, saving $20 a week will add up to over $1000 in a year. Here are tips for wiser spending that can help you find money to save:

• Drink tap water and pocket the money saved from buying bottled water.
• Shop your local farmers markets and prepare healthy meals at home to save money.
• Cut transportation costs by using public services. Or, ride your bike when possible.
• Consider needs versus wants – ask yourself if you really need a daily latte, premium cable, or a weekly manicure.
• Visit your local library and check out movies and books and read current magazines.
• Barter to get your children piano, karate, or dance lessons.
• Replace incandescent light bulbs with compact florescent light bulbs. By replacing just five light bulbs, you can save about $60 per year.
• Purchase prepaid phones to keep your family in touch and save on cell phone bills.
• Delay your purchase – wait one week to see if you still think the purchase is necessary.
• Consider buying store brand foods rather than the higher priced national brands.

Children need practice earning, saving, and spending money – just like adults. Young children need chores that they can manage and that can be done relatively quickly. "When my children were preschoolers, one of their favorite chores was to 'shine the kitchen.' To do this chore, they used a glass cleaning product and paper towels to clean the front of all the shiny, vertical surfaces that were sticky such as the refrigerator, microwave, and dishwasher door," says Kathy Sweedler.

Older children can manage more complex chores such as wash a car, organize a hall closet, weed a flower bed, or tidy a bookcase. Earning money and choosing how to spend the money can teach several lessons. "Talk to your children about the difference between needs and wants," recommends Sweedler. "Parents provide needs such as food and shelter; children can help buy things they want such as new toys."

Help your children see the worth of what they buy in terms of the work that is required to earn money. For example, a teenager who is paid $7.00 an hour needs to work at least three hours to buy a $21.00 movie DVD.

For more ideas about how to save money, and to explore the fun saving calculators, visit the Plan Well, Retire Well: Your how to guide website at www.RetireWell.uiuc.edu