In the real world, many people struggle to find room to save after paying for more pressing expenses such as food and housing. Those struggling with a heavy debt load can take advantage of free or low-cost nonprofit counseling services. The National Foundation for Credit Counseling can help you find a counselor. Fee-only financial advisers also offer professional support, often on an hourly basis. The National Association of Personal Financial Advisors makes it easy to search for advisers by ZIP code.
For those who prefer to develop a plan on their own, these elements are essential:
Know what you spend. Set aside time at the beginning of each month to track what you actually spent the previous month.
Create a budget and stick to it. Use your monthly spending analysis to help build your budget and then see if you're staying within your goals. A growing number of online budgeting sites such as Mint.com can help.
Automate financial transactions. This includes setting aside savings and also paying recurring bills.
Get organized. Gather and centralize your key financial records, including online accounts and passwords.
Check credit card and banking fees. Look carefully for new fees and interest charges. Banking fees have become much more transparent since new federal laws went into effect.
Review insurance terms and rates. Is the deductible on your auto's collision coverage still the right call as your vehicle's value declines? Is your home insurance providing you more protection than you need, given declining property values? Do you still need as much life insurance?
Refinance your mortgage. With home-loan rates still at 50-year lows, take a careful look at refinancing.
Pay annually if you can. Insurance and other annual services may let you pay your bill in smaller monthly installment payments. While these monthly payments are not considered a loan, that is exactly what they are. You'll wind up paying the equivalent of interest in the form of higher payments.
Downsize to one car. If your household has two cars, try leaving one in the garage for a month. See how it affects your life. With a modest amount of planning, many households may be able to make do with a single car.
Regardless of which specific strategies make sense for you, there's one to-do that applies almost universally: Make the time to review your financial affairs and come up with a plan to boost savings. One day, you'll be glad you did, and richer for the effort.