Making Resolution To Save Money Stick

3472135 ray martin on credit freeze
The Early Show asked several people on the streets of New York what their No. 1 New Year's resolution will be and they all said the same thing. No -- not losing weight -- it was -- saving money.

That didn't surprise the show's money maven, Ray Martin.

In Part Two of his three-part series offering year-end financial advice, he pointed out Friday that people may already be realizing they may have spent a tad too much during the holidays. They're facing high winter heating bills. More significantly, the credit crunch and housing downturn are hitting people where it hurts - right in the pocketbook.

More than half of Americans, 52 percent, say they're not saving enough, according to a brand new study by the Consumer Federation of America. Seventeen percent say they can't afford to save at all, while 35 percent say they're saving, but not enough to meet short- and long-term financial needs.

The New York Times recently reported that, in 1985, Americans were saving $11 for every $100 they brought home; now the savings rate is around zero, and household debt is at a record high.

When The Early Show asked people how they intended to follow through on their resolution to save money in '08, most said things such as, "I'll spend less time at the mall."

Trying to cut back on spending is a common response, and it's certainly a good idea.

And Martin pointed to something he truly believes almost everyone needs to do: "Most taxpayers get a refund, with the average last year at about $2,450. Instead of giving too much money to the IRS and feeling the pinch at home, now, more than ever, is the best time to file a new Form W-4 and claim more withholding allowances, which reduces the taxes withheld from your paycheck. If you typically get a refund each year, it would just be a little smaller, but your take-home amount would be bigger.

The real key, Martin continued, is to have that "extra" money each week funneled directly into a savings or retirement account. You won't miss the money on a week-to-week basis, since your take-home pay will stay the same. Even if you say you're going to save that refund check, the temptation to spend at least a portion of it is great, and Martin's plan eliminates that temptation altogether.

What if you actually need to spend that extra money each week? Or if you don't receive a tax refund regularly? What ELSE can you do to save money?

Beyond making major changes -- getting rid of a car, moving to a smaller home, getting a second job, etc. -- this is a case of small changes making a big impact, Martin stresses.

Some of the most "painless" ways to save -- which don't involve "sacrificing" things such as your morning coffee, etc -- are spelled out in this column filed by Martin:

Spend Less and Save Thousand$

Where does your money go? Do you often find that there is month left over at the end of the money?

Money-gobbling culprits such as high gas prices and home heating bills, and increased costs for health insurance, may seem to leave little opportunity for saving money.

But take a second look at where your money goes and you might be surprised to find that your budget has more money-losing leaks than the federal government.

It doesn't have to be that way. You can spend less, save more, and still live well. Without much pain and effort, you can make some simple moves and squeeze out a few hundred, even a few thousand dollars in savings each year.

One of the first places people cut, when they need to manage with less money, is eating out. If a couple cuts their weekly dining out down to once a month, they can save $150 a month, or more. This can also be good for the waistline.

Another savings tip in this area is to bring your lunch to work. I do it, and I figure this saves me over $100 a month in cafeteria food and beverage costs.

I don't smoke but, for those who do, it is a stupid thing to do. Not only does it ruin your health, it also wastes a lot of money. It can cost more than $120 a month to support a pack-a-day habit, not to mention that people who smoke have much higher health-related costs. If you smoke, put stopping smoking at the top of your New Years resolutions list if you want to save some real money each year.