Lots of ways to save

Shopping until you drop: That's so five years ago.

The trend for Americans for 2009, as the housing crisis continues and more and more layoffs are announced, is saving, whether in a piggy bank, a real bank, or even some cash stuffed under the mattress.

"We've definitely changed our habits in the last several months," said Marietta resident Kristina Martin, 37. "We've cut back on eating out especially and just tried to save a little here and there. And we're holding on to that money and not spending it somewhere else."

The result, she said, is a feeling of security.

"We would still be in trouble if my husband or myself lost our jobs," Martin said. "But if we need a new washing machine or the car breaks down, we can handle that."

The old standby of having six months' income saved for emergencies is still good to follow, said James Watson, a financial adviser with Fleming Watson Financial Services in Marietta. But every little bit is important, he said.

"It's never too late to get started," Watson said. "It's smart to save as much as a person can in any economy and to build up some amount of cash reserve to help weather times like this."

Watson said the struggling economy has changed some of the advice he gives.

"For short-term savings, traditionally we would have suggested money market funds, but with the interest rate environment very low, there's not very much return right now," he said. "Sometimes CDs are a better choice right now - for six months or one year."

For long-term investments, Watson still recommends money market accounts, he said.

"As rates go back up, money markets will rise," he said.

He has tried to educate clients on how to weather economic downturns and still make investments with their money, Watson said.

"It's a concern for both us and the clients, but experience has told us that the U.S. economy will turn around and get better," he said. "Investment portfolios will get better - we just don't know when."

Shay Walker, 31, of Reno, said she's had relatives advise her to literally stick money under the mattress or in a safe place at home until things get better.

"People are really scared with the banks going under and everything," she said. "I think it's instinct to do that even if it's not the smartest thing."

Watson said there's always a better option than storing money at home, where it's vulnerable to a fire or a break-in.

"We have some good, stable local banks that are FDIC insured," he said. "At least there, your money can earn something."

With three children to support, Walker said she's unable to save much anyway, although it's a goal.

"We're paycheck to paycheck," she said. "I think that's the norm around here."

Marietta resident Jim Shaw, 56, said he has been saving - a lifelong habit - and is especially grateful for it now.

"I know so many people who don't or can't save money," he said. "I've done a little at a time so right now I'm not as worried."

Shaw started saving with his very first paycheck, often putting away only $5 to $10 from each paycheck.

"It was something my father really instilled in me," he said. "I always saved and now I have investments, although I stay pretty conservative."

For those who have a little bit of money to invest, now may be just the time, said Watson, as scary as it may seem.

"Now is probably a very good opportunity to be buying while the market is low," he said. "If you need the money in three years, or longer, put it in the market."

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LilyOValley
01-08-09 6:52 AM »Report Abuse	I would also add that the problem with most Tresury-bonds with maturities more than a 90-day T-bil (which can easily be held to maturity), is that it trades, so price fluctuates with demand and supply. I believe we are about to see a tremendous increase in supply of Federal debt, which means these longer term Government instruments will probably begin to trade down in value (they are already high-priced/low-yielding because savers have pumped the price via fear of stocks). As such, if one is accepting of risk, I prefer instead buy very high-quality stable non-cyclical stocks that pays a dividend, very high-quality corporate bonds, or alternatively stick with the very short-term stuff from the Government that can be held to maturity. Just my humble opinion, not qualified advice by any means, and not intended to be. Check with a real professional (I am not) if you don't feel confident in your own views.
LilyOValley
01-08-09 6:42 AM »Report Abuse	Literally 'stuffing money in a mattress' betrays a serious lack of understanding of economics, finance, and current events. It is bad for the saver and bad for the economy. First, part of our economic problem is the need to rebuild faith in the banking system and get banks to do more lending. Second, that is why your FDIC deposit insurance was increased by law, a few months ago, to 250K. Also, money market account returns were also guaranteed by the Government. Your money is only what it is because it is backed by the 'full faith and credit of the government'. So, by putting it in a mattress, you are denying the banks the funds they need to lend (and improve the economy) and you are denying yourself a modest, but completely safe return on your funds. Sorry to put it so simply, but that idea is really dumb. You might even say it is 'anti-American'.
Johanna
01-07-09 11:37 PM »Report Abuse	Use to be..MBNA maybe???had one of the best rates for CD's or IRA's? Bonds are great gifts and investments.
weefooze
01-07-09 11:27 PM »Report Abuse	Another way to save is an IRA through a local bank.They have no connection to a brokerage firm or Wall Street.Regardless what the Dow is doing they increase in amount and are not taxed until you withdraw money from them.
fairytales
01-07-09 7:27 PM »Report Abuse	I agree with Mr.Watson..there are great financial institutions that will increase your savings! Less tempting to spend it, as well.

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