For What It's Worth: Saving 101

WSVN -- Owning your own home -- it's the American dream.

That's certainly the case for Jessica and Jorge Tejera, but Jessica says it's not so easy to attain.

Jessica Tejera: "It's going to be really hard for a young couple to buy a house or be able to save any money with all the things going up in price."

Like most couples, saving money doesn't seem like an option.

Jessica Tejera: "I try to save on my own, but when you know the money is there it's very easy to say, 'I need this or I need to purchase this,' and things just add up."

Seven's financial expert Allie Jablon says she hears that all the time. But you have to commit to breaking the debt cycle.

Jessica Tejera: "The spiral of debt begins when you don't have an emergency fund set away."

So when it comes to saving, how do you start?

Allie Jablon: "The best starting point is to put away 10 percent of your salary, and by the end of the year, that's going to add up to one month of your income. That's a great place to start."

So say you bring home $2,500 a month. You should put $250 of that directly into savings.

Your best bet is to find a liquid account, either a savings or money market account, where you can access the money if you need to, but it's still drawing interest.

The end goal is to have savings to match your monthly expenses if the worst happens.

Allie Jablon: "By setting aside an emergency fund, when these emergency expenses arise, you're not going to have to worry about going into debt."

The next step to saving is to make sure you're investing for retirement.

Use your company's 401-K or any other employer-sponsored retirement program.

Most companies will match a percentage of what you contribute.

Allie Jablon: "Even if your employer does not have a matching program, or they contribute into your 401-K for you, you still need to invest your money into a 401-K because this is tax-deferred income."

Allie says it's money you will hardly miss because it's automatically deducted from your paycheck.

And, think about this:

Allie Jablon: "Putting away $95 a month, starting at the age of 20, and assuming a 10 percent interest rate annually, by the time you're ready to retire at 65, you're a millionaire."

Jessica knows she and her husband are far from being millionaires right now.

Jessica Tejera: "The goal is, in a year, to be able to purchase a home and then make sure we have enough money in the bank in case anything should happen."

But she has paid off their debt and is setting financial goals to save for their future.

And the key: Once you have started saving you have to resist the temptation to dip into it for non-emergency spending.

Don't use it for vacations or new furniture.

That money should come from your disposable income.

FOR MORE INFORMATION:

www.bankrate.com