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Most Americans are not saving adequately for retirement, and most lower-income households do not have adequate emergency savings for unexpected expenditures such as car repairs or medical illnesses.

America Saves Week is Feb. 25 through March 2, and throughout the state, Alabama Cooperative Extension System agents will encourage and assist citizens to assess their savings progress and take action to advance it. Extension agents and other members of the Alabama Saves Coalition will also encourage Alabamians to enroll in the America Saves program, reduce spending and eliminate debt.

"Here are five saving strategies from America Saves that may help get you started in the right direction," says Theresa Jones, a regional Extension agent in Consumer Science and Personal Financial Management with the Alabama Cooperative Extension System.

1. Pay off high-cost debt. The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. For example, if you have a $3,000 credit card balance at 19.8 percent, and you only pay the required minimum payment of 2 percent of the balance or $15 whichever is greater, it will take 39 years to pay off the loan. With accumulating interest, you will pay more than $10,000 in interest charges.

2. Buy a home and pay off the mortgage before you retire. The largest asset of most middle-income families is their home equity. Once these families have made their last mortgage payment, they have far lower housing expenses. They also have an asset that can be borrowed on in emergencies or converted into cash through the sale of the home.

3. Participate in a work-related retirement program. Many employees turn down free money from their employer by not signing up for a work-related retirement program such as a 401k plan. If they did participate, with a dollar-for-dollar match, they would likely receive an annual yield of greater than 100 percent of their investment.

4. Outside of work, save monthly through an automatic transfer from checking to savings. These savings will provide funds for emergencies, home purchase, school tuition or even retirement. Almost all banking institutions will, on request, automatically transfer funds monthly from your checking account to a savings account, U.S. Saving Bond, or stock mutual fund. What you don't see , you will probably not miss.

5. Earn up to 4 percent or more on many Certificates of Deposit or U.S. Savings Bonds. Most CDs from a bank or credit union, and Series EE and Series I Savings Bond, currently pay between 3 and 4 percent. With a 4 percent yield, your money will double in 18 years.

Governor Robert Bentley also has declared Feb. 25 through March 2 as Alabama Saves Week. Take time to celebrate the week by opening a new savings account, adding to an existing account, or assisting others to save.

For more information, contact your county Extension office or visit


Dorothy Horton

3/15/2013 10:21 AM
Pass on to family members.