Financial Security in Life: Finding Money to Save

Why Save?

Families save money for their future goals and to have an emergency cushion available for unplanned expenses.

As a family, you must determine your savings goals. These goals will be based on the values of family members. For some families, it's important to save for retirement, education expenses, or a vacation. For other families, having a home, giving to charity, or making a major purchase are important goals. Goals are different for different families. Learning to save money is the first step in reaching family goals.

Getting Started

Sacrifices are hard to make but necessary to achieve your savings goals. Examine your spending habits. Discuss as a family which expenses are necessary for your lifestyle. Can you reduce or eliminate any spending categories? A shared approach to these decisions fosters respect and keeps communication open within the family.

Establish a "dollar watch" campaign. Food, utilities, household supplies, telephone calls, recreation, entertainment, clothing, and transportation could be put on the "dollar watch." Have family members make a list of ways to economize. Try to adopt a few of each family member's suggestions. Cooperation is more likely when everyone contributes to the process.

Practice Good Spending Habits

Use a Shopping List

Keep a household shopping list and write down items as they need to be replaced or purchased. Try to buy only the items on your list. This way you will only buy what you need. Try not to shop when you or family members are tired or hungry.

Go on Fewer Shopping Trips

Reduce the number of times you visit stores. Spending less time shopping reduces the chance that you will buy something you don't really need. Making fewer shopping trips will also save you both time and transportation expenses.

Buy Generic or Store Brands

Store brands, which are usually less expensive than brand-name products, are great for basic staples such as sugar, flour, salt, vinegar, and household supplies such as bleach and ammonia. Many store brands are produced by major manufacturers with ingredients similar to those used in well-known brand-name products.

Avoid Waste

Monitor your use of food, household appliances, transportation, and energy to reduce waste. Check and clean filters, run appliances with full loads, lower thermostats, turn off lights, store foods properly, and eat leftovers.

Get Information

Many sources of information can help you make better buying choices. A public library has books and magazines you can use to research products you may want to buy. Contact your Penn State Extension office for free consumer information. In addition, many Internet sites provide good information about finances, lowering expenses, and increasing financial skills.

Do It Yourself

Increase what you do or make at home. Buy fewer convenience items. Prepackaged foods and services are more costly because you are paying someone else for the preparation and for extra packaging. Convenience in small packages is the most expensive, so avoid buying individual servings of food products.

Clean Up Your Act

Generic or store-brand vinegar, baking soda, salt, bleach, and ammonia can be used for many cleaning tasks--and they cost much less than brand-name cleaning products. Many specialized cleaning products contain unnecessary perfumes and are expensively packaged.

Find It for Free

Find free recreation and entertainment at local parks, playgrounds, and community concerts. Look for community health services for free vaccinations or medical services. Check for free or low-cost educational programs at your local library, community colleges, schools, local agencies, or your county Penn State Extension office.

Pay Yourself First

Pay yourself first is a simple concept that paves the way for your accumulation of wealth. It simply means that each time you receive money from a regular source of income, such as your paycheck, or from an occasional income source, such as a tax refund, you save part of it. Over time, the money saved will grow due to compound interest and will be available for emergencies or for your family's goals.

You Can Do It!

Changing habits is never easy, but the reward will be a growing nest egg and less stress if a financial emergency arises. As with most things in life, "it's the little things that mean a lot." Taking that first important step can help you begin your journey to a financially secure future.

For more information, contact your local Penn State Extension Office for the following publications:

Financial Security in Life: Now and Later--Pay Yourself First

Taking Control of Your Money 4: Planning for Saving and Spending

Bouncing Back When Your Income Drops 4: Setting Spending Priorities

Bouncing Back When Your Income Drops 6: Cutting Corners and Economizing

Prepared by Valerie Manganello, extension educator in Crawford County, in collaboration with Marilyn Furry, associate professor of agricultural and extension education, and Sarah Siegel, extension educator in Clarion County.