Published 12:00 am Tuesday, January 29, 2013

here was a time when saving pennies in an old mayonnaise jar actually got you somewhere. Nowadays, it seems almost impossible to have extra pennies to drop into that jar. Families barely make due and often spend their paycheck before it is earned.

Whether it’s saving for a family home, sending the kids to college, travel around the world or retirement, the time to start saving is now.
“Young families really need to evaluate every penny they’re spending and understand that there are ways to save money on virtually everything. Think and act frugally so you can build savings and address the goals that really matter to you.” According to financial expert Farnoosh Torabi, the author of “Psych Yourself Rich: Get the Mindset and Discipline You Need to Build Your Financial Life,” “Families should revisit their aspirations often and make sure they’re spending habits don’t interfere with accomplishing these goals, whether it’s to buy a new house, send children to private school or renovate the kitchen.”
Making changes to the way you spend your money could easily help you save towards your target. Be frugal, but avoid being cheap and foolish. Look for things that are both affordable and worthwhile. Saving money by buying cheap, processed and less-than-nutritious foods, for instance, might actually cost you more in the long run if your health was put at risk.
A few relatively easy ways to save include putting your thermostat down by just a few degrees, regularly maintaining household appliances and your automobile to reduce the need for costly repairs or replacement, cutting out expensive and unhealthy lifestyle options like smoking, and making family entertainment night a few hours with a board game around the dining room table instead of taking the whole crowd out to the movies. Using cash instead of credit cards will keep you more aware of the money you are spending and will negate hefty finance charges.
Get into the habit of “paying yourself first” with every paycheck. If you put 5 or 6 percent of each paycheck into a savings account, letting the amount accumulate interest, you might find yourself with a comfortable little nest egg. Teach your children to save by encouraging discretion when spending, patience when saving and discipline to always keep their goals in sight.
Before you develop a savings plan, you need to know what your goals are. Start by making a list of the things that are important to you and the approximate and eventual cost of each item. Decide how long you expect to wait until you reach each of your goals. Be realistic, you will need more than a weekend to save up for a house or a car. Finally, calculate what you will need to save from each paycheck after other necessary expenses like rent, groceries, medical appointments, etc.
Here are some steps to insure a promising financial future: List your monthly income. Next, list monthly expenses such as rent or mortgage, insurance, utilities, groceries, credit cards, medications, and any other obligations such as dues, alimony, child support and taxes. Don’t forget to include your average travel costs, student loans, and gifts and donations. If you need to list expenses that occur over several months, enter a monthly average. Add upcoming events such as moving into a new place, and one-time essential purchases (furniture, installation of telephone lines, etc). Be sure to add a percentage of your income to your savings account on a regular basis (paying yourself first) and see those savings add up.
When you add your columns together, hopefully your expenses are less than your income; if not, see where you can tighten your spending habits or add to your income level. After clearly seeing your income and expenses on paper, it is easy to know where modifications need to be made.