The Art of Saving

September 13, 2011

By Renuka Patel, Market President, Central California Region for Union Bank, N.A.

Financial experts agree that saving should be a part of every household budget; unfortunately many Americans aren’t prepared for financial emergencies, nor are they saving enough for retirement.  Like most skills, saving money gets easier with commitment and practice.  Just as an artist hones his skill to master an art, consumers can develop their skills and creativity to master the art of saving.

As we approach the final quarter of 2011, consider the following tips to help save and build wealth:

Establish a savings account and pay yourself first

Get in the habit of systematically setting aside a portion of your paycheck into savings before you begin paying monthly bills and making discretionary purchases. If possible, set up an automatic transfer from your paycheck into a savings or investment account. With less money available in your checking account, you'll be more mindful of what you are spending. If your employer offers a matching contribution to your 401(k) account, be sure to take full advantage of that benefit.

Develop a budget that includes paying down debt

For a few months, keep track of every expense, including small fees such as out-of-network ATM fees or late fees.  It might surprise you how much these expenses can add up. Look closely at your income and spending habits and establish a budget to provide you with a plan to save more and pay down debt. As you pay off debt, you’ll have more money to put into savings that will earn interest, instead of charging you interest.

Cut back on monthly bills and expenses

Take a close look at your monthly expenses and find ways to reduce them.  Reduce heating and electricity bills by lowering your thermostat, taking shorter showers or switching to energy-efficient light bulbs. Save more by making meals at home instead of eating out or getting take-out, making your own coffee and packing your own lunch to bring to work.  Consider whether you need both a land line and cell phone and look into bundling cable, phone and internet services to see if you can find a monthly savings. Get creative and sock away extra money in a savings or investment account.

Take advantage of compound interest

Tap into the power of compound interest --- interest earned not only on your original investment, but also on its accrued earnings.  Regular investments into savings and investment accounts early on can lead to future wealth.

The foregoing article is intended to provide general information about saving and is not considered financial or tax advice from Union Bank.  Please consult your financial or tax advisor.

Renuka Patel

Renuka Patel is a senior vice president and market president for the Central California Region for Union Bank, N.A., a full-service commercial bank providing an array of financial services to individuals, small businesses, middle-market companies, and major corporations. As of June 30, 2011, the bank operated 403 full-service branches in California, Washington, Oregon, and Texas, as well as two international offices. UnionBanCal Corporation is a wholly-owned subsidiary of The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is a subsidiary of Mitsubishi UFJ Financial Group, Inc. Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG, NYSE:MTU), one of the world's largest financial organizations. Visit www.unionbank.com for more information.

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