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By Cindy Sumner
 There are a few other things in life you can be sure of besides death and taxes. One is that major expenses will come your way, and you will be expected to pay for them. Whether it’s medical expenses, car repairs, education costs, or eventually, retirement, the only way to prepare financially for your eventual rainy day is by starting a savings plan. Families today have gotten out of the saving habit. In 1998, the personal savings rate was less than 1% of disposable (i.e. spendable) personal income. By comparison, the rate fluctuated between 5-10% from the period from 1950 to 1990. Even with the income level of most families with young children, it is possible to start saving for the future—here’s how.
The Urge to Spend vs. the Urge to Save
The easiest times to begin saving are when you receive a lump sum payment, like an IRS refund or a bonus (try to put at least 1/3 in savings), or when your monthly income undergoes a consistent increase as after a raise or when one parent takes on another job. Most of us make plans for this extra income long before the money is in our pocket. To help break this urge to spend, choose a goal that you are willing to save for: a nice evening out, new furniture for the nursery, a down payment on a larger home to accommodate your growing family. Place pictures that represent your goal in conspicuous places as reminders to save before you make an impulse purchase.
Simple Savings Plans
One of the biggest mistakes people make is trying to save too much too soon. They come up with a savings program, which they stick with for a few months, but then a spouse is out of work or some major repair is needed. Saving gets put on hold while the family struggles to catch up. To avoid this trap, begin putting away a modest amount that you’ll hardly miss—perhaps $20 a month. Think of it in terms of forgoing two lattes a week! Gradually increase the amount at least once a year, or eventually inflation will catch up with your savings.
Another technique for establishing a savings plan is to “pay yourself first” from each paycheck, instead of simply saving whatever is left at the end of the week or month. Many families continue spending until their checking account is empty. There are always more diapers, baby food, and new shoes to buy. If you put away a small amount at the beginning of each pay period, you still may wonder where all the spending money went by the time the next paycheck arrives. But at least you’ll know that there’s still something in a savings account earning interest.
Make it Automatic
Self-discipline goes only so far for most of us when it comes to putting money aside. Make saving easy on yourself by enrolling in an automatic savings program. Almost every bank or mutual-fund company allows you to authorize monthly deductions from your checking account or paycheck. That money is then automatically placed in the investment of your choice. As long as the deduction amount you’ve chosen is reasonable, you probably won’t miss the cash you never had the chance to spend.
The constant financial demands of raising a young family make saving money a challenge. However, the reality is that children tend to cost even more as they get older. Starting a savings plan, however modest, will help you handle unexpected costs now, and prepare for even bigger expenditures down the road.
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 Cindy Sumner is an author and a former contributing editor for MOMSense magazine. Her book, Dollars & Sense, is a practical, easy-to-understand guide that will help moms discuss and handle finances more effectively. She has written several other books including – Planes, Trains, and Automobiles… for Kids; Time Out for Mom… Aaahh Moments; Mommy’s Locked in the Bathroom: Surviving Your Child’s Early Years with Your Sanity and Salvation Intact; Family Vacations Made Simple; and Mommy’s Trapped in the Minivan: Surviving Your Child’s Middle Years with Your Sanity and Salvation Intact. Cindy lives in Sheldon, Illinois, with her husband John and their three children.
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