The tougher the economy becomes the more likely we are to say that we can’t afford to save. Most people have very little money saved and live day to day on all of their income. This is not the way to plan for the future. If you do not have an emergency fund, what will you do when an emergency occurs? Unfortunately, the answer is usually that you will turn to credit cards. This is a poor solution and will only lead to more problems. That’s why an emergency fund is a necessity.

Financial advisers suggest that an emergency fund be sufficient to pay your living expenses for at least three months. This is a large sum of money for the average person but there are ways to work towards this goal.

Open a separate account specifically for your emergency fund. Use the type of account available with the highest interest yield.

Begin a change jar. Everyday you should deposit all of your change into this jar. When making debit purchases, request small amounts of money back so you can add that to the jar, also. At the end of each month, deposit this savings into your emergency fund bank account.

After you have paid off a loan, continue to make the same payments, but this time they should go directly into your “fund” account.

Reinvest your money into higher-yield accounts at every opportunity.

It may take some time to reach your goal of three months living expenses, but think of how good you will feel knowing that you are providing a safety net for the future for you and your family.

Millions of people are either retired or planning their retirement in the very near future. Studies are showing that there is a definite financial problem looming in the future for many of these retirees. Statistics predict that three out of five middle-class retirees will exhaust all of their retirement funds in the near future if they continue their pre-retirement lifestyles.

In order to remain solvent during their retirement years, it is going to be necessary for these retirees to drastically reduce their standard of living. Estimates state that this reduction will need to be approximately 24 per cent in order that they can anticipate outliving their assets. To reduce all of your expenses by 24 per cent would be an extremely difficult challenge for anyone. None of the people currently retired ever anticipated this cutback and are not mentally prepared to make all of these sacrifices. Their parents had company pensions to help support them. Today people have only their own savings to supplement their income and, in many cases, this is not sufficient.

Business and the government need to act now to prepare for the retirement of the baby boomers in the near future. So far, however, there does not appear to be any action planned to assist in what could well be a national crisis.

As life expectancy increases, there will be many more retirees and a large number of them could be living in poverty in the future. It is time to address these needs now and we should all request our elected officials to aid by passing laws that are friendly to the senior citizens of our country struggling in their “golden” years.

Many people believe that we are currently in a recession. The federal government is trying not to commit to this statement,but facts seem to indicate that we have arrived. This is not our first recession and will probably not be our last. 1975 was not a very good year for budgets. Inflation was over 14%, unemployment was near 6% and food and gas prices were skyrocketing by the standards of that time. Americans had no choice but to drive used cars and live within their budgets. Other options were not available back then. Credit cards and car leasing were not a way of life. Of course, we did not have internet connections, cell phones or fitness centers. Whether you realize it or not, there are some positive aspects of living in a recession. Here are just a few:

Since fast food dinners are no longer an option, family dinners are once again a time for families to come together to share a meal and their day’s experiences. Research has shown that this forms better family communications and a more balanced diet. Here you are saving money and improving family relations.

We are no longer receiving ten or twenty credit card offers per week. There has been a great reduction in junk mail, we have saved trees, and reduced the amount of mail we have been receiving in our mailboxes.

Almost all Americans, regardless of income, are using coupons in these inflationary times. Surveys indicate that coupons can save the average family up to 25% on their monthly grocery bills. This seems a bit high to me but then I haven’t participated in this research.

With gas prices reaching the all time high of $4 plus per gallon, people are turning to alternative transportation. Some are walking to work while others are riding bikes. This provides the exercise we need along with the savings that will help our budget to be successful.

If you have always wanted an SUV but couldn’t afford one, this is the time to buy. With everyone concentrating on gas mileage, these vehicles are sitting on the lots unsold. Consider making an offer if this is a purchase you want to make. Remember, though, you will have to purchase the gasoline to keep this car on the road. If you do not drive long distances, this may not be an issue. If you do, carefully consider your decision.

A period of recession is an opportunity to start a new business. Rents are cheaper, wages are lower, and competition is less than at any other time. Discounts are usually available on goods and services.

Gardening can also be considered a benefit of these financial times. Planting your own fruits and vegetables encourages a healthier diet. The exercise you get gives numerous physical benefits while also relieving stress and improving flexibility. You will have fresh fruits and vegetables, have saved money, and, as a result, be in better physical shape.