Monthly Finance Message:

Save For Your Future: Join America Saves

February 2010

Barbara O'Neill, Ph.D., CFP®
Extension Specialist in Financial Resource Management
Rutgers Cooperative Extension

The week of February 21-28 is America Saves Week (ASW), a week devoted to promoting the benefits of saving money and reducing debt (see www.americasavesweek.org), All across the U.S., events will be held by ASW coalitions to encourage people to sign up to be "American Savers" and take action to reach their goals. Until very recently, Americans' savings rate was historically very low. While many people are currently saving more and spending less than they did previously due to the recession and high unemployment, it remains to be seen whether these new savings habits will last once fear and uncertainty subside.

America Saves Week is part of America Saves (see www.americasaves.org), which is an example of a "social marketing campaign." This means that the messages associated with this program are designed to change people's behavior rather than to sell them a product or service, as is typical with most marketing messages. Just like the "Buckle Up for Safety" campaign several decades ago that got many people in the habit of wearing seat belts, America Saves seeks to get more Americans into the savings habit to improve their future financial security and that of the country.

There are many reasons for saving money, including peace of mind and to have cash available for emergencies such as unemployment, a sick child, or the deductible on an auto fender-bender. Another motivating factor is to accumulate money to achieve future financial goals (e.g., buying a new car, taking a cruise, a child's college education, and retirement). To calculate how much you need to save to achieve a financial goal, divide the amount you need by the time (e.g., number of months) you have left to save.

Here's an example: if you want to save $5,000 by next year for the downpayment on a new car, you'll need to put aside $416.67 ($5,000 divided by 12) a month, or $96.15 ($5,000 divided by 52) a week. Download a goal-setting worksheet from Rutgers Cooperative Extension to calculate the savings required for short-, medium-, and long-term goals.

You may be thinking, "There's no way I can save any money! I'm living from paycheck to paycheck." But most people find they can save when they really put their minds to it. What we think about, we often bring about! Below are six relatively painless small steps to get started:

  • Pay Yourself First - Make your "savings bill" a part of your spending plan, just like rent or utility bills. Automate savings through an employer credit union or retirement savings plan (e.g., 401(k) plan) or through deductions from a bank account to purchase U.S. savings bonds or mutual fund shares.
  • Continue Paying A Loan - If you're about to pay off a loan, continue making the same monthly payment - to yourself! You won't miss the money saved because you never had it available to spend previously.
  • Bank A Windfall - Whenever you receive unexpected money - an inheritance, bingo winnings, retroactive pay, an insurance dividend, etc. - put at least part of it into savings.
  • Save "Extra" Paychecks - If you're paid bi-weekly, in two months of each year you will receive three paychecks. Employees who are paid weekly will receive an "extra" check (i.e., 5 paychecks in a month) during four months of each year. The months vary with each year's calendar and the day of the week on which you are paid. Save at least part of this money.
  • Save Coupon Money - Put aside the amount you "save" by using coupons at the supermarket or drugstore. If you save $5 a week using coupons and put the "savings" (the money you did not spend) in your savings account, in a year you'll have over $250.
  • Collect Loose Change - At the end of every week (or more often), empty out your pockets and wallet and put the change in a jar. As savings accumulates, deposit the change into a savings account.


  1. Rutgers
  2. Executive Dean of Agriculture and Natural Resources
  3. School of Environmental and Biological Sciences