Intro B&H101 Under the Oak The Mom Chronicles Wall Street History Week in Review Glossary Financial Planning Understand Taxes   "BUYandHOLD" Tax FAQ   The 13 Steps to Investing Foolishly   Carlson on Taxes Past Questions Main Question: Last week we answered part one of a question from newlywed Jamie Kelleher - basic rules for beginning investors. The second part of Jamie's question was: how to save money. Here are 9 easy ways to make it a regular part of your life, regardless of how much money you earn.   Answer: Dear Newlyweds, Make savings your first bill. Once a month, when you pay your bills, write a check to deposit into your money market fund here at BUYandHOLD or your savings account at your bank or credit union. Start by saving 1% of your take-home pay the first month and then increase the amount by 1% each month. By the end of the year you'll be socking away 12%. Use automatic savings plans. If you don't see it, you won't spend it. Arrange for a certain amount - it can be as little as $50 - to be taken out of your paycheck and automatically transferred to your savings or money market account. Tip: Ask if your employer also has an automatic plan for EE Savings Bonds. Alternative: Have your bank automatically transfer a certain amount from checking to savings each month. Leave credit cards at home. Pay for groceries, gas and miscellaneous items with cash. You'll spend less and also avoid those whopping monthly interest charges on unpaid credit card balances. Defer taxes. Money in an IRA, Keogh, SEP, 401(k) or other qualified retirement plan grows tax-free until withdrawn. You can fund these plans by making small contributions several times a year. That may be easier than paying in one large lump sum. Alternative: Buy investments that are fully or partially tax exempt such as municipal bonds, EE Savings Bonds and U.S. Treasuries. But don't put them in your retirement plan. Contribute to a stock purchase plan. Many companies allow employees to contribute part of their salary to buy the firm's stock through automatic payroll deductions. Caution: Do not, however, put all of your savings in one company's stock. Think Enron! Reinvest stock dividends. This is a no-brainer way to increase the value of your portfolio. Here at BUYandHOLD, it is easy and free to re-invest your dividends. Click here to learn how. Keep making payments. When you have paid off a mortgage or a loan, continue to write a check for the same amount (or at least half the amount) every month and put it into savings or your BUYandHOLD account. You've learned to live without that money, so now you can sock it away. Save your change at the end of the day. Small amounts add up. Put your nickels, dimes and quarters into a jar before going to bed. Better bet: Save one-dollar bills. Treat yourself. Saving is smart but not always immediately gratifying. The payoff is sometimes several years away. So, spend a little on yourself now and then; it will make saving much easier. Good luck!

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