Six Steps to Smart Savings

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Follow these steps to be on your way.

1. Get a financial planner
Women underuse this resource, but 73 percent of those surveyed recently said working with an adviser made them savvier and 66 percent felt more confident about having money for the future.

2. Save aggressively, but invest cautiously
Risk does not always yield reward, according to the Schwab Center for investment Research. Since 1970, an aggressive investor earned an 11.2 percent average return while a moderate one got 10.5 percent. But the slightly higher return was offset by higher risk–and larger losses in the stock market–during down years.

3. Don’t skimp on insurance
Unexpected expenses derail savings plans fast, so get enough coverage for health, disability, home and auto. For breadwinners, life insurance is a must.

4. Retirement savings trump college savings
Your kids have their whole lives ahead of them to pay off their college loans. When you retire, you won’t have the same luxury.

5. Keep wills and insurance policies updated
If there’s a death in the family, your financial plans can collapse if your papers aren’t in order. Make sure your policies don’t still name parents or ex-spouses as beneficiaries.

6. Build Equity, don’t tap it
Owning your home gives you a nest egg that you can draw on when you downsize. But don’t take that value out too soon–or you’ll still be paying off your mortgage after retirement limits your income.


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