Today is the final day of America Saves Week. America Saves is a national campaign to persuade Americans who have little or no savings to "build wealth, not debt." Savers identify a savings goal and take action on a plan to achieve it. The America Saves program is free and motivational. Check out monthly messages from America Saves e-wealth coaches: http://bit.ly/hSJnXY.

During this past week, you've received daily messages about the benefits of saving money, how to save, where to save, and why to save. As America Saves Week winds up, we'd like to know if these messages were helpful and if you joined America Saves and set a personal savings goal to achieve. Please complete this short online survey: http://bit.ly/ExSurvey It is short (3 minutes) and everyone who completes it will be entered into a drawing for free gift cards.

I hope you enjoyed celebrating America Saves Week with us!

Want to save money? Get out of debt. PowerPay will help you get there faster.

This online tool was created by our sister Extension organization in Utah. Using it, you will create a schedule showing you how to pay down your debts by appying three simple strategies:

1. How much above the minimum payment can you afford to pay each month?
2. Do you have some cash on hand that you can put toward your debt now?
3. This is where the PowerPay concept comes in: as you pay off one creditor, apply the amount of that payment to the next debt you target for early pay-off.

PowerPay will give you a schedule of when each of your debts will be paid off and when you will be debt-free, with and without these strategies. You'll be amazed at the difference.

Give it a try! Go to www.powerpay.org.

To learn more about saving, visit America Saves: http://bit.ly/fHbGQy.

Worth taking time to think about:

Like a traveler who has no map, if you don't have financial goals or a plan to achieve them, you won't get very far. Financial planning is very much like planning a trip. You need to know where you want to go, when you want to arrive, how you plan to get there, and how much it will cost. Once you have determined your financial "destination," savings will get you there. For more information about savings for your financial goals, visit http://bit.ly/fWpOBu. .

What does your morning routine look like? Mine goes like this: let the cat out, pick up the morning newspaper, turn out the porch light, start the coffee pot. No thought involved -- it's all automatic!

Research shows that many people who save and invest effectively do so because their money management is also automatic. For example, one relatively painless way to save is to automate your savings plan. To do this, simply have your bank or brokerage company take money directly out of your checking account or paycheck and place it into a savings or investment account. For more savings ideas, check out the advice of the America Saves program's e-wealth coaches: http://bit.ly/hSJnXY.

Once you are saving automatically, the next step is to consider increasing your rate of saving and investing regularly. Can you increase your savings rate by 1% each year? With compound interest, saving just 1% more of your pay ($400 on a $40,000 income) annually can provide tens of thousands of dollars more for retirement. If you're 25, 35, and 45 and earn $40,000, you'd have $164,523; $66,623; and $24,436, respectively, by saving 1% more, assuming an 8% average annual return. The more time you have to save, the more money you'll have. Become an American Saver (it's free and motivational) at http://bit.ly/gliVkL, and will help you make your saving automatic.

Want some great financial advice from some of the nation's leading financial experts...for free? Seriously, this service really exists and nobody is trying to sell you anything. The America Saves program posts monthly messages from e-wealth coaches about topics related to savings and personal finance. To view what they have to say, see: http://bit.ly/hSJnXY.

Here are two good tips for ways to build a significant amount of savings fast.

Continue Paying A Loan

If you're about to pay off a loan, continue making the same monthly payment – to yourself! You'll never miss it. First, decide where to deposit the money - a savings account, money market account, IRA account at your bank or mutual fund company, investment account at your broker, etc. Set up an automatic transfer from your checking account to the savings account for the amount of the debt you just paid off. And watch the money grow. Compound interest, here we come!

Bank A Windfall

Whenever you receive unexpected money – an inheritance, bingo winnings, tax refunds, retroactive pay, etc. – put at least part of it into savings. Many of you will be getting a tax refund very soon. On your tax form, you can instruct the IRA to deposit the entire amount directly into one account, or use Form 8888 to split your refund into more than one account. So it's easy to divide your refund between, for example, a savings account and checking account. With Form 8888, you can also choose touse all or part of your refund to buy series I savings bonds.

Make a rule in your home that you'll save at least a certain percent of any unexpected check you receive. My husband just got a refund from medical insurance that we had no idea was coming. Yippee! I put it in the bank this morning, before we could even think about spending it.

Become an American Saver! Sign up at http://bit.ly/gliVkL to set your savings goal and get more tips throughout the year.

Where do most people get the money to invest for future goals? Some receive lump sums, such as pension distributions, settlements, and inheritances. A few lucky people win the lottery or some other big prize. Most people, however, get money to invest the old fashioned way: they earn it and then they save it.

Setting goals can provide the motivation needed to reduce spending today in order to save for a secure future tomorrow. Be specific with a date and a dollar cost. An example is "save $8,000 for a used car in 4 years." Knowing your timeline can help you choose appropriate places to put your money (e.g., CDs for short-term goals and stocks for goals that are 5+ years away). For more information about saving and investing, see: http://bit.ly/fWpOBu.

To calculate how much you need to save to achieve a financial goal, divide the amount you need to save by the time (e.g., number of months) you have left to save. If, for example, you want to save $5,000 by next year, 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. Become an American Saver (it's free and motivational) at http://bit.ly/gliVkL.

Celebrate America Saves Week and yourself! Set a financial goal today and begin moving forward with your finances.

Some kinds of expenses are harder to cut that others. Here are ideas for cutting two kinds of expenses can can pay dividends right away.

One household expense where significant savings can often be found is the family food bill. The next time you go food shopping, take a good look at what's in the cart before checking out. Are there expensive snacks or convenience foods that you can do without or make yourself? Are you buying anything that might end up in the garbage because nobody really likes it? Are you comparing the cost of store and manufacturer's brands and taking advantage of coupons and special promotions? For more savings tips, visit: http://bit.ly/fLuD29.

How energy efficient is your home? Get tips from the U.S. Department of Energy for conducting a DIY home energy assessment at http://bit.ly/C37Eq. Learn simple tips for evaluating your home for air leaks, insulation, heating/cooling equipment, and lighting. An energy efficient home will save you money on your monthly utility bill.

According to the U.S. Department of Energy, a typical U.S. family spends about $1,900 a year on home utility bills. Unfortunately, much of that energy is wasted. Find out how to conserve energy and save money with a free energy guide: http://www.energysavers.gov/pdfs/energy_savers.pdf.

Make use of the money you save. Enroll in America Saves and put your food and energy savings to work: http://bit.ly/gliVkL.

Ask a financial planner how people can increase their savings and you're likely to hear the phrase "pay yourself first." This means setting aside money from each paycheck as soon as you earn it, rather than waiting to see what, if anything, is left at the end of the month. In other words, savings is a top priority in your budget like rent.

The best way to "pay yourself first" is to use some type of automatic deposit plan.

• Sign up for your 401(k) or 403(b) plan at work so that money comes out of your paycheck automatically, before taxes.
• Set up and IRA and have your employer automatically transfer money into it from each paycheck.
• Start an automatic investment plan by having money transferred from your checking account into a mutual fund each month.
• Simply set up a checking to savings transfer with your bank, and build up that savings account.

With any of these, the money is placed into savings before you even miss it.

For additional motivation, become an American Saver. Join America Saves at: http://bit.ly/gliVkL.

Saving money can be a challenge! How can we get started? To save effectively you might need to do the BIG stuff (like save through an employer-sponsored retirement plan) as well as do the SMALL things that add up over time. Here are two America Saves tips to help you move forward with your saving goal:

1. Do you participate in a work-related retirement savings program? According to America Saves, many employees turn down "free" money from their employer by not signing up for programs such as a 401(k) plan. If they did participate, with a 50% match, they would likely receive an annual yield of greater than 50% on their investment. Now, that's a good return on your money! Sign up for your workplace savings plan and become an American Saver at http://bit.ly/gliVkL.

2. Indulgences can put a dent in your finances. According to America Saves, one way to establish a savings discipline is to "save" an amount equal to whatever is spent on nonessential indulgences. Put a matching amount in a cookie jar each time you splurge on beer, wine, cigarettes, designer coffee, etc. If you can't afford to save the matching amount, you can't afford the $4 super mocha low-fat latte. For more savings tips, visit: http://bit.ly/fLuD29. Remember, small amounts do add up over time!

Do you know how much money is in your bank account? America Saves urges you to avoid overdraft fees by keeping track of your spending. The $20-40 you could save each month by not bouncing checks or overdrawing could put nearly $500 in your emergency savings account. For more savings tips, visit: http://bit.ly/fLuD29.

In observation of America Saves Week, we'll be posting numerous tips on our blog this week to help you save.

Do you use cash for small purchases, and end up with bothersome change in your wallet or pocket? Save your loose change! According to America Saves, saving fifty cents a day over the course of a year will allow you to save nearly 40% of a $500 emergency fund. Remember, small changes equal big savings! For more information, visit http://bit.ly/fHbGQy.

Have you switched from cash to using a debit card or credit card for most of your purchases? (And you pay off that credit card each month so you don't pay any interest, right?) The America Saves program suggests that you review your credit and debit card receipts, bank statements, and/or online records. Then, ask yourself if you should reallocate some of this spending to an emergency savings account. For more savings tips, visit: http://bit.ly/fLuD29.

Stay tuned for more tips, today and throughout this week.

Across America there's an amazing sound: "clink, clink, clink." It's the sound of savings accounts adding up and revolving credit card balances going down! Personal saving as a percentage of disposable personal income was 5.3 percent in December, according to the U.S. Department of Commerce. This is a significant increase from the personal savings rate a few years ago – and definitely a good trend – congratulations to all who are saving more money!

However, other numbers lead me to worry. Thirty-four percent of Americans have no retirement savings and 27% have no personal savings, according to the results of a recent The Harris Poll. A Hewitt study found that four out of five Americans are expected to fall short of the money they will need to meet their financial needs in retirement.

What do all these numbers mean for us? Well, we're moving in the right direction, but overall we need to do more saving and investing to have a secure financial future in the long-term. Don't let this discourage you! The Hewitt analysis found that American workers can significantly improve their financial situation with a few small adjustments.

• First, if you're not currently saving, start!
• Next, regularly increase your savings rate, and your contribution to retirement plans. The Hewitt analysis reveals "many workers who commit to increasing their retirement contribution by as little as one percent each year for five years will be on track to meet most of their financial needs in retirement."
• Or, plan to work longer. Delaying your retirement age to age 67 also will help avoid savings shortfall.

What do you need to do? Take a look at your financial situation and decide what steps you want to take. My suggestion is to set a savings goal, and put it into writing. Writing down goals helps make them clear and increases our likelihood of accomplishing the goals.

America Saves is a nationwide campaign to help people save money, reduce debt, and build wealth. Next week (February 20 – 27) is America Saves Week. Enroll as an America Saver (for free), set your savings goal online, and you'll receive motivating newsletters, money saving tips, and more to help keep you on track with your financial goals.

When you save regularly, small amounts add up. Make saving a habit -- in the long-run you'll be glad that you did!

Related posts:

• Celebrate Savings!
• Have Fun Being a Cheapstake
• Meet the New Superhero: Your Emergency Fund!

We all want to "do the right thing" with our finances, but sometimes it's hard to know what the right thing is. A question recently came to me about a person who has large student loans and credit card debt. She is working in a low wage job, not yet able to find a position in her field. She's living with a friend and has kept current on all her debt payments. She even manages to have just a little extra each month (amazing). Her question is, what's the best thing to do with that money? Put it toward student loans? Pay extra on her credit cards? Start an emergency fund? Or start an IRA and put it toward retirement savings?

Student Loans

Student loans are one of those special debts that never go away, even if you file bankruptcy. There are certain circumstances where some of the debt might be forgiven, but by and large, you're going to pay those loans no matter how long it takes you. So wouldn't it make sense to use any extra money to pay down those obligations? Maybe. But one rule of thumb when deciding which debt to pay down first is, Attack the debt with the highest interest rate first. Her student loans probably have lower interest rates than credit cards. Plus, she may be able to get a tax deduction for student loan interest. So student loans may not be the best use of extra dollars.

Credit Card Debt

Paying off credit card debt is a very good thing to do, especially if you have a high interest rate. But today, there's the possibility of unintended consequences. In the old days (pre-2008), credit limits only went in one direction: UP! Therefore, when you paid down your balance, you had more available credit. If your credit line was your emergency fund, paying down the balance gave you more available credit to tap.

In 2008 and 2009, that changed. Judging by the number of complaints I've read and heard, lots of people saw their credit limits cut. Some said that the reductions in credit limit seemed to be their "reward" for paying down the balance. So, yes, they had less debt after paying extra on the credit card, and they reduced the amount of interest they were paying. But the reduction in their credit limit meant that they had less available credit to draw on in an emergency. Therefore, a person had to choose between paying down debt and building an emergency fund.

It's hard to say how likely credit cards are to reduce credit limits today. I found some recent complaints online, but I did not find any authoritative source talking about current trends or statistics on this. Since cutting credit limits has been a recent pattern and this person's financial situation sounds precarious, caution may be in order.

Emergency Fund

I would vote for building a small emergency fund first, rather than putting every available dollar toward the credit card balance. She might split her extra dollars between the two goals. It's a trade-off between paying more in interest now and the security of having some liquid (accessible) funds. Once she has at least a small emergency fund, any extra cash could go entirely toward paying down the credit card debt.

There are several acceptable options for where to keep an emergency fund. I discussed these in a June 2008 post.

Retirement Savings

The standard recommendation is to pay down debt - especially high interest debt - before putting money away for retirement. That assumes that the person will actually pay down the debt, and not just charge up the credit cards again. I once encouraged a friend to sign up for his retirement plan at work even though he had credit card debt. I knew him pretty well, and I did not believe that he would ever pay off the credit card. As a result, he might never save any money toward retirement if we followed the standard advice.

Fifteen years later, he still had credit card debt. But he also had a substantial amount in his retirement account.

If this woman is disciplined and serious about paying down her debt, the standard advice might work for her. Once her credit card debt is paid off, she can decide whether to devote that amount each month toward student loan debt or to retirement savings. Things that could tip the balance would include the interest rate on the student loans, whether her employer offers matching on her retirement contributions, whether she has any income tax liability and, if so, whether she qualifies for the Saver's Credit. If she owes no tax for the year, she gets no benefit from the Saver's Credit or from contributing to a traditional (tax-deferred) retirement account.

She might consider a Roth IRA. Her contributions are are not deductible, but qualified earnings will be distributed tax-free. She could actually take out her contributions at any time without tax or penalty, allowing the account to function as a last-ditch emergency fund.

Using her extra dollars for any of these choices will be a good thing. By evaluating her choices, she may be able to get a little more bang for her buck.

What would you do? Click on my name below, and send me your thoughts. We'll feature your ideas and comments in a future blog post.

Related posts:

• Taking control of holiday credit card debt
• Contact Your Creditors Before You're Late
• Who Me? Ready to Save for Retirement?

• Meet the New Superhero: Your Emergency Fund!