Save, Save. Don’t Splurge on a Piggy Bank, a Tin Can Will Do.

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By Shira Boss

MOST people would describe the classic novel "A Tree Grows in Brooklyn" as a coming-of-age story. I think of it as a vivid personal finance book.

As the main character was growing up in Brooklyn 100 years ago, her family sometimes didn't have enough money to eat. Yet they had a tin can nailed to the floor of the closet, and they made a deposit whenever they had any money. Even when the girl and her brother earned a few cents from selling scrap metal, they dropped half of the coins into the can. When more dire times hit, the bank was raided. Then it was nailed down again.

Good grief. If that family could manage to save, then we can, too. But most of us don't.

There is much advice from experts about the need to pay down our credit card debt, and most of us are well aware we should be saving money in retirement accounts. But what needs to be talked about more is the necessity, and almost magic, of simple savings.

Saving money is not the sexiest financial move, but it's probably the most important. So start squirreling. Even if it's the change from your pocket. Start incubating a nest egg, which is not just for retirement. A cash account may be for a flatter television set, a vacation, new clothes, a period of unemployment, a down payment on a house, car repairs or whatever treat you can dream up.

I know, times are tight and 7 out of 10 Americans report living paycheck to paycheck, meaning there never seems to be enough left over for savings. In 1985, Americans were saving $11 for every $100 they brought home; now the savings rate is around zero, and debt is at a record high.

The lack of savings is not a problem just for the working and middle classes. "Even among the ‘moneyed’ population, there's not always an understanding of the mechanics and importance of saving," said Marc Minker, an accountant in Manhattan who is involved with the national "Feed the Pig" campaign, sponsored by the American Institute of Certified Public Accountants and the Advertising Council, to encourage people 25 to 34 to save.

A friend of mine who grew up in a family of modest means in rural upstate New York worked his way up to a six-figure salary in Manhattan but lived large and never set anything aside. At age 49, he has managed to buy a house in Westchester with his wife and is now a year into building up a six-month emergency fund.

"I can't believe I was so stupid," he said of his earlier years. "I thought money would never run out, that I could spend whatever I wanted and run up all the debt I wanted and it wouldn't matter."

It is a widespread and harmful myth that one needs to make more money to save some of it. "We’ve met people who can save on a salary of $30,000, and people who have not a penny in savings and a salary of over $300,000," said Manisha Thakor, co-author of "On My Own Two Feet," a personal finance primer for women. "Saving is about a mind-set and a commitment, not a level of salary."

When I was most stressed financially, I forced myself to put 5 percent of every check into an emergency account. It built up surprisingly quickly and ended up paying for surprise expenses that otherwise would have gone on a credit card. Now I’ve worked up to putting some cash from every paycheck into envelopes marked Goody Bag, which I dip into for luxuries like a nice teapot. That definitely makes earning money and spending it more fun.

"The powerful thing is that saving is not about deprivation, saving is actually all about spending," Ms. Thakor said.

In a survey this year by the Consumer Federation of America, 4 in 10 households reported having savings. More than half reported that they built the accounts by making regular automatic deposits from their checking accounts. Half saved from tax refunds, and a third contributed loose change.

Ms. Thakor suggests an initial goal of $2,000 in a savings account, which, according to a survey of women in 2005 by the Consumer Federation, is the average amount of unexpected expenses in a year. That "starter emergency fund," she says, is supposed to be used as needed and replenished. It's better to borrow from yourself than to rely on a credit card and feel as if you can never get ahead. Additional savings can be set aside for other short-term and midterm goals, assuming that you are also putting a percentage of your income toward retirement.

Some of Mr. Minker's lower-income clients despair of not having enough to get by, and his advice to these clients, whom he advises without charge, is that developing the habit of saving is what's crucial, not the amount. "When you start slow and keep at it, it's a snowball that’ll get bigger and bigger," he said.

My husband and I started a loose-change fund about five years ago using a tin can for effect, then transferring the money periodically to a money market account. It has grown to $2,660. From the beginning, we have called it the Vineyard Fund. Before you laugh at that optimism, consider that if we kept our tin can going until retirement age, it would be worth over $100,000. (More, if we stopped using the quarters for laundry.)

The key is to reverse the habit of spending first and paying later, with interest. We need to get back to the old-fashioned way: saving the money, then spending it. That costs less, and causes less stress and anxiety, than using debt or going without.

Play with online calculators to see the impact of saving money. And include the children. A common lament from adults in financial trouble is that they were never taught about money.

The Internet is full of free strategies and motivational stories from fellow savers at sites like www.betterbudgeting.com and www.americasaves.org (where you can register your savings goal). For hard-copy tips on how to wring extra expenses out of your budget, take a look at Mary M. Hunt's book "Live Your Life for Half the Price" or "Pay It Down" by Jean Chatzky.

Christopher Sariti, a friend who lives in Hoboken, N.J., said he did not save anything, outside of his 401(k), for his first 20 years in the work force. "We got paid every Friday," he said of his first job, at a grocery store. "Friday night we went out, by Monday there was little left, and you scraped by until Friday again." He never changed the paycheck-to-paycheck routine until he wanted to buy an engagement ring and didn't want to put that on a credit card.

He saved up to buy the ring with cash. Then he and his fiancée, Kendra Crook, opened a joint savings account online to pay for their wedding. Now, after two years of marriage, they are using the same account to save for a down payment on a condominium. Better late than never, but my friend, now 41, says he is "kicking myself every day for not starting sooner."

"I tell everyone I know to save something, $10 a week, $100 a week, whatever you can do," he said. "If I had put aside $20 a week when I started out, and not touched it, making that down payment would be a whole lot easier now."

Suppose he had squirreled away $20 a week in an account earning 5 percent interest (not counting Uncle Sam's cut). He would have had $35,300 by the time he proposed three years ago, and $44,200 by now. And that's without investing in the stock market, where he could have earned much more. I’ll spare my friends that calculation, but let that inspire the rest of us to nurture our nest eggs.

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