Plan to Save to Increase Financial Security

     According to Dr. Tucker, a study by the Northwestern Mutual insurance company found that savings was linked to increased happiness. Results showed that people who were planners and did future-oriented things like setting goals and saving money to achieve those goals, felt happier and better about their lives than those who did not make plans. Dr. Tucker notes that in this study, planning, not wealth was key to saving money. Low income individuals who made a spending plan with goals were far more likely to have saved money for emergencies than those who did not have a plan.

     So how can you start saving or increase your current level of savings? Dr. Tucker suggests making SMART goals:

     S (Specific): Determine dollar amounts, dates and resources to be used. For example, set a goal of saving $3000 by January 1, 2012 by making payroll deductions through your credit union.

     M (Measurable): Determine regular amounts to be set aside weekly or monthly. If your goal is to save $3000 in one year, then set aside $250 per month or $57.69 each week.

     A (Attainable): Know the goal is doable within your financial situation. Keep a record of all expenditures to see where you may be spending excess money. Perhaps you eat out often or buy coffee every day at the donut shop. These are areas where you can cut back and save money.

     R (Realistic): Have the resources to achieve the goal. You may think you do not have the income to save money but you don't need a big income to save. Much financial gain can be made with small dollar amounts. Consider the following:

     * Save 25 cents a day and you'll have $91.25 at year's end.

     * Save $2.50 a day and you'll have $912.50 at year's end, plus interest.

     * Save $250 per month and you'll have $3,000 at year's end, plus interest.

     T (Timebound): Establish a specific timeline for accomplishing the goal.

     By setting financial goals and saving money, you will improve your financial security and feel in better control of your life. Set SMART goals to help you achieve success.

 Karen Thomas is a family and consumer sciences educator for Penn State Cooperative Extension of Lackawanna County.