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To those who want to save more money in 2009 and beyond...

How to Master the
"Psychology of Saving"

Dear Wise Consumer,

Okay, it's time to jump away from retirement math and get to the knitty-gritty. The finance geeks of the world can preach about 401K's, annuities and other helpful financial instruments. But if your noggin isn't wrapped around an important concept, all is lost.

My wife and I have been crazy bent on saving more money. And man has it been hard on the spending brain! But unless we plan on being broke when we retire, it's gotta get done.

Let's face facts. We're hard wired to spend like the Federal Reserve. When we get a raise, bonus or other windfall of cash it's easy to "celebrate." You're a smart and hard working person. You take care of your family. In these economic times you deserve a pat on the back.

You know that you need to save more money. It's no secret to you that 401K or other investment vehicle has got to grow. Before you know it the time to pick that retirement home on the lake will be here. Will you have the cash flow?

While on our journey to saving more money a thought hit me. We must master the psychology of saving, if we want to stay disciplined in saving money. Yet there are some reasons this doesn't always happen.

Five Common Reasons We Fail to Save Money

First, we love to overspend. This is like letting the tub fill with water for a hot bath, but not turning off the faucet. If you want to save more spend less. Second, we lack time value. We don't always appreciate how fast time is running out on our working lives. Retirement will show up faster than a tax increase. And like taxes it'll cost you if you're not prepared.

And this leads us into the third reason. Our "Tomorrow Attitude" is lethal. We put off building our 401K's. We tell ourselves we can start saving another day. But the truth is we're past due on saving. Look around your house or life. What hasn't gotten done based on this attitude? Fourth, unexpected expenses can ruin the best saving plan. One of the kids gets sick or the small dog breaks its leg. Believe me I've been there. And finally debt normally stems from overspending.

Always remember something about debt. It kills financial flexibility. When you have too much of it you can't save enough money. When your savings plan is slowed or delayed time starts to work against your retirement.

How to Master the "Psychology of Saving"

Here are five easy steps to practice. They'll be tough at first. But stick with these puppies and you can't go wrong. My wife and I practice these. Sometimes with gritted teeth, but they literally pay off.

Master Step #1: Decide What's In It for You

What do you want when it's time to hang it all up? Where do you want to live? What kind of retirement income will you need? No matter what we buy or where we go, it's based on one thing. What's in it for me? Tucked deep inside your heart is a retirement lifestyle you've always wanted. On some days you can practically taste it. You feel like you're sitting in that fishing boat or walking your dog down a peaceful road.

When my wife and I decided what we wanted in retirement, our spending habits changed. We stopped eating out as much and bumped up the savings. It's amazing what happens when Starbucks and Teriyaki joints don't get your hard earned dough!

Master Step #2: Set Attainable Goals

Remember that savings is about thinking before you act. Setting attainable goals will help you think and believe you can actually save money. Start with a small amount to save per week or paycheck. I would go with $25-$50. That's the average amount a person spends on coffee and side goodies. Imagine having a "Starbucks Fund" that could put you into your dream retirement. It will happen when you set attainable goals. Move up the amount as your confidence grows.

Master Step #3: Develop a "How Would It Feel" Attitude

How would it feel to...

*Wake up when you wanted?
*Have fat and steady retirement checks each month?
*Volunteer for your favorite cause?
*Have time to spare to do what you want?

Some of the most successful retirees develop this attitude. The best part is that it gets you focused on what's really important. Suddenly you start taking your money and time seriously.

Master Step #4: Check the "Deserve Meter"

Don't stop reading. I can see you looking to do something else around the house. Hey, I know what it's like to feel like I deserve to spend money. I've done it as a reward for several things. Some of these include a hard day at work, a project well done or selling something highly important. But now checking my "Deserve Meter" saves me money. If I "deserve" something it only comes out of my Mad Money fund. Remember, it's your spending fund. That's right you should even budget for spending. Every single version of Congress over the years could use one to. Spending isn't bad. We need to spend from time to time. And it's healthy to spend for fun. But OVERSPENDING will kill your savings.

My deserve meter runs on a scale of 1-5. If I really believe I deserve something, I've hit DEFCON 5! My tendency to spend money I shouldn't is too high. This means its time to say no and walk away. Watch out when you hit 3-5 on this meter.

Master Step #5: Snowball Debt System

I don't know who invented this system. But I know who the best is at teaching it. Dave Ramsey is the Author of "The Total Money Makeover." We're using this plan to move ahead financially. You can catch his radio show five days a week on KCIS 630 AM radio, from 3-7. He advocates a Snowball Debt System. You simply start with your smallest debt and move up to the largest.

Let's say you pay $100 a month for a $1,500 credit card bill. Once that's paid off you put $150 toward the next one. Each time you pay a bill off you bump up the next monthly payment by $25 or more. Your debt literally snowballs into oblivion!

These aren't exhaustive steps for developing a saving psychology. But it'll get you moving in the right direction. This way of thinking has helped my wife and I save more money and pay down debt.

Drop me an e-mail and let me know how you're doing with this plan. I look forward to hearing from you!

Clyde McDade is a Financial Copywriter. He's the author of the upcoming E-book, "How to Grow More Money for Retirement and Your Child's College Fund." He can be reached at accelcs@comcast.net.

The information in this article is not to be taken as financial or investing advice. Always seek the services of a Financial Advisor, Accountant or Financial Planner.