Strategies to saving: 5 tools and tips to help you save money to meet your financial goals.

Position:MONEY MANAGEMENT
 
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IT WAS AT THE AGE OF 47 THAT CHERYL DERRICOTTE realized she needed to be disciplined about saving money. "There I was with a spotty savings and no emergency fund," says Derricotte, who works for an environmental nonprofit in Oakland, California. "I knew that I had to think about retirement, something I'd not been too serious about."

A determined Derricotte kicked off her savings strategy last year by allocating 10% of each paycheck via automatic deductions to her organization's 401(k) retirement plan. She also began contributing directly from her checking account $300 per month into several American Funds mutual funds (which can be liquidated without penalty).

To offset the money she was putting away, Derricotte also started budgeting. For instance, she now saves some of her discretionary income in an "eating out" envelope. When the envelope is empty, she stops eating out. She drives a used 2005 Mazda and has also cut back on new clothing purchases. Those cutbacks allowed her to bump up her monthly 401(k) contributions to 15% in 2012. She's now socking away $900 per month in total savings.

"It took some belt-tightening, but the payoff has been significant," says Derricotte. "Knowing that I'm putting money away and that I'm not only building a nest egg but also a rainy-day fund gives me peace of mind that I never had before."

According to its annual survey assessing household savings in the U.S., America Saves reports that the nation's savings rate has declined over the past three years. The number of people who spend less than their income and save the difference, build home equity, have adequate emergency savings, and think they are saving enough for retirement has gone down. Less than half the respondents, 42%, say they have a savings plan with specific goals; and just more than half, 52%, of respondents who are still working think they are saving enough to maintain a desirable standard of living in retirement.

Felicia Gopaul, a certified financial planner and president of College Funding Resource in Bloomfield, New Jersey, says people who don't save usually wind up scrambling when unexpected expenses rear their heads. "When you don't save, everything is an emergency," she says. "The car needs tires, something breaks, or your children need money for a trip--the smallest additional expense can throw you into a tailspin."

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You must pay yourself first. Don't make excuses, says Gopaul, who tells consumers to carve off...

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