To get started, use the worksheet on the next page to formulate a monthly spending plan. Fill in the monthly dollar amounts for each item on the worksheet; then subtract your total expenditures from your total income. This is the amount you can save without making any changes in your spending habits. A recommended savings rate is 10 percent of your take-home pay. If your total from the worksheet is a negative number or is less than you would like to save, find areas where you can cut spending.

To find ways to save, look over your worksheet entries to see what you can do to reduce expenses. Perhaps you can rent videos rather than going to the movies; cut down on your dry cleaning bill; use coupons at the grocery store; join a carpool; or take your lunch to work rather than eating out. Over time, you may be able to find ways to save even more. You could, for example, buy a used car instead of a new one, or investigate the possibility of a lower mortgage rate if you own a home.

As you identify categories where you will reduce expenses, revise your worksheet to reflect the changes and see how the "bottom line" grows. Once you’ve determined how much you can save each month—no amount is too small—add a permanent "savings" category at the bottom of the worksheet, under "other."

Successful savers know that an important rule is: pay yourself first. Set aside savings as soon as you get your paycheck, before you have a chance to spend the money on anything else. It helps to have savings automatically deducted from your paycheck or checking account. But don’t get discouraged if an emergency cuts into your savings. Just get back on track the following month.