<DIV class=content>ost Americans don't save as much as they should. But the reason has less to do with dollars and cents or macroeconomics than with how they feel about their cash. To many people, saving is a punishment; spending is a reward.</DIV>
<DIV class=content>Financial planners sometimes fail to connect with clients because they ignore this psychological aspect to saving. If you've had trouble saving because you simply prefer to spend your money, I suggest that you try developing some tricks that will make saving a financial game that you can win.</DIV>
<DIV class=content>Experts might scoff at this strategy. It is not one designed to gain you the highest return. But if you're saving nothing and you just can't seem to get started, you've got nothing to lose.</DIV>
<DIV class=content>Start by thinking of ways to segregate your money. Move a portion of it out of cash that is available for spending and into a separate pocket if you will, where it's hard to get at. Once you view saving as a game of wits, you're more likely to succeed.</DIV>
<DIV class=list>Open a savings account at a small bank where you don't have an ATM card. Even large cities have them. When you open your account, pick up a stack of bank-by-mail envelopes.</DIV>
<DIV class=list>Write a regular check to your bank account and put it in your deposit envelope. Then keep it for a week. That gives you an artificial cushion in your bank account and gives you time to get accustomed to making it without that money. After a month, raise the amount of your regular savings check.</DIV>
<DIV class=list>Start small. Experts suggest you save 10 percent of your income. It's a good goal. But don't give up just because you can't. Establishing a savings habit and saving consistently is better than putting aside a big sum just once. Start with something you know you can live with - say $25 a week. Promise yourself that you will save that much every Friday.</DIV>
<DIV class=list>Every day take a dollar bill - or a $5 bill - out of your wallet and put it aside in a bank deposit envelope. Once a week, drop off your envelope in the bank overnight deposit.</DIV>
<DIV class=list>Monitor your ATM withdrawals. Decide how much you will take out each week and make it last. Make it a little tight. And try to decrease it over time if you can. If you have money left at the end of the week, put it into your savings account envelope.</DIV>
<DIV class=list>Picture your goal. Now that you're underway, start focusing on what you are saving for. Dieters are advised to paste a picture of their new svelte selves on the refrigerator. Savers, too, should focus on a vacation, a new home or car. You spend some money now and some later. The money you spend later is called savings. Picture what you will do with it.</DIV>
<DIV class=list>Decrease the number of exemptions on your withholding form at work. If you claim one, go to zero. The government will take a few extra dollars out of each paycheck. This goes against most financial planning advice because you're giving the government an interest-free loan. But if you would otherwise fritter the money away, you're better off locking it up with the government. When you receive your tax refund, dump it directly into your savings account.</DIV>
<DIV class=list>List your credit cards beginning with the one with the highest rate. Cut all of them up except the two with the lowest rates. Begin paying extra every month on the card with the highest rate. When it's paid off, move to the second highest rate card. When you're finished, start adding $50 a month to your savings account.</DIV>
<DIV class=list>If you have had the same term life insurance policy for some time - say five years or more - you can probably cut your premiums dramatically by changing policies. Here's why: Term is straight insurance protection. When you buy a policy, you get a medical exam and the insurer knows you're healthy. But each year the premium increases - as you grow older and the time stretches out after your health exam. If you apply anew and get a fresh exam, the insurer sees you as a better risk. In addition, there's a premium war going on right now in term insurance.</DIV>
<DIV class=list>Pay a little extra each month on your mortgage by "rounding up". You will add equity to your home, giving you extra flexibility when you decide to move or refinance. If you prepay $100 a month on a $150,000 loan, you will save $72,952 in interest and shave 7-1/2 years off the loan. You do not have to commit to paying a specific amount. Just round up your payment to the nearest hundred.</DIV>
<DIV class=content>Once you've become a reliable saver, it's time to think about how to earn a better return. One simple way to do that is to take some money from your bank savings account and buy a certificate of deposit. Consider this: Bank passbook accounts as of 1998 pay about 3 percent. But if you lock your money up in a CD for just one month, you can get 4.97 percent. Go for three months and you can get 5.05 percent. Next, you'll be ready to start investing. <img src="images/green.gif" width=7 height=7 border=0 alt="green square"></DIV>
