The recent economic situation has many people trying to save more money. In 2005, the personal savings rate had fallen to below 1 percent, indicating that many Americans were spending either all or even more than they were earning. The current personal savings rate, nearly 6 percent, shows that more Americans are saving. Savings provides many people with a feeling of financial security – to be able to pay off debt, prepare for retirement, or purchase a large ticket item such as a house or car.†

Many of us, are interested in saving more, but are not certain how to get started. One important first step is to find out where you spend your money. Start by writing down all of your expenses for one month. Typically the big expenses, such as rent and groceries are easy to track, but make certain to include all expenses such as trips through the drive-thru, dry cleaning, and vending machine purchases. Finding money to save becomes easier once you realize where you money is currently going.

Normally it is easier to find small things to cut from your lifestyle than it is to make big adjustments. It is important to realize that small savings add up over time. Review your expense log and identify areas where you can reduce your expenditures. Realizing how much you could actually save is a motivating factor. Assume you are currently spending $7 per day on lunch at work, if you decided to pack your lunch instead, you would be able to reduce your cost of lunch to $3 per day. If you pack your lunch 20 days during the month, you would save $80 per month. If you invested the $80 per month at a very conservative 3 percent return, over the course of five years you would have over $5,000.

There are many ways to spend less and save more, by making a few lifestyle changes:

Rethink how and when you shop. Try to reduce your temptation to spend by only shopping one day per week.

Always shop with a list and try to stick it. Remember a sale really is not a sale, if you are buying an item that you do not need.

Spend cash, instead of using credit or debit cards.

Look for discounts! You can find discounts on everything from restaurants and entertainment to kidís birthday parties.† Read your local paper and check weekly advertisements for discount deals.

Review your current bills. Determine if you are really using and need the elaborate cable package or cell phone plan.

Check out your local library for DVD or book rentals.

There are many ways to save without making big lifestyle changes.† Once you find success in making small lifestyle changes, bigger changes become easier.

Source: Jennifer Hunter, Extension Specialist for family Finance, University of Kentucky, College of Agriculture