Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give.

~William A. Ward

Monday, January 28, 2008

5 Strategies for Saving

Saving Strategies from America Saves

1. Pay off high-cost debt.
The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. For example, if you have a $3,000 credit card balance at 19.8%, and you pay the required minimum balance of 2% of the balance or $15, whichever is greater, it will take 39 years to pay off the loan. And you will pay more than $10,000in interest charges.

2. Buy a home and pay off the mortgage before you retire.
The largest asset of most middle-income families is their home equity. Once these families have made their last mortgage payment, they have far lower housing expenses. They also have an asset that can be borrowed on in emergencies or converted into cash through sale of the home.

3. Participate in a work-related retirement program.
Many employees turn down free money from their employer by not signing up for a work-related retirement program such as a 401(k) plan. If they did participate, with a dollar-for-dollar match they would likely receive an annual yield of greater than 100%on their investment.

For additional information, see the American Savings Education Council Web site

4. Outside of work, save monthly through an automative transfer from checking to savings.

These savings will provide funds for emergencies, home purchase, school tuition, or even retirement. Almost all banking institutions will, on request, automatically transfer funds monthly from your checking account to a savings account, U.S. Savings Bond, or stock mutual fund. What you don't see, you will probably not miss.

For additional information, please see the U.S. Securities and Exchange Commission Web site.


Most CDs from a bank or credit union, and Series EE and Series I Savings Bond, currently pay between 3% and 4%. With a 4% yield your money will double in 18 years.

For additional information, please see the Treasury's Savings bond website.

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