In 1981 the US personal savings rate was nearly 12%. Today it's less than 5%.
Saving money can seem like a big challenge when you feel that your income is already over-committed. But financial planning experts point out that almost everyone can find ways to trim spending, to buy more efficiently, and thus find money for savings.
Make a budget. A budget provides a plan for spending. It sets out your fixed and regular expenses such as mortgage or rent, utility payments, and car or loan/credit card payments and sets goals for other necessary but modifiable expenses, such as how much you spend on groceries or clothes. It also sets limits for discretionary spending, such as what you spend on entertainment, recreation, or optional travel. Put a savings goal in your budget.
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Pay yourself first. Paying yourself first before other expenses is the number one rule for successfully saving more. Many people discover that if they put aside a set amount in savings with every paycheck, then they don't really miss the money saved.
Pay as you go for regular expenses. If you make a rule that you must use cash, checks, or debit cards instead of credit for some of your expenses, you may be more likely to control spending on those items. Food, fuel, utilities, and clothing might qualify for that list.
Pay on time and manage your checking account wisely. Not paying your bills and credit accounts in a timely manner hurts your credit rating, and typically incurs late fees. These can quickly add up to sizeable amounts of money. Bouncing a check or overdrawing your account with a debit card will also incur fees. Nationally, millions of consumers monthly pay millions of dollars in these fees. Manage your credit accounts and money wisely to avoid these unnecessary drains on your money.
Pay off high interest debt and credit cards. Yes, this advice is as old as dirt but it doesn't make much sense to put additional savings aside at a 4% or 5% return while you're shelling out 7% to 19% or more in interest on credit card debt.
How Do You Manage Your Money?
Interactive Budget Worksheet