by Iza Goldwasser

Created on: April 14, 2009

Never has there been a more important time to save. With the global economy under such enormous pressure and the reality of job scarcity looming closer for more and more people, saving is a lifestyle imperative.

The rule of thumb to save 10 of an individual or family income is a good place to start. While it's tempting to ease the pressure of living under a media frenzy of recession and the greater wisdom to cut back, it's also tempting to shake off the mantle every once in a while and splurge on the dinner out, the bottle of perfume or the latest ipod.

Rather avoid the temptation and put that extra bit into your savings account. It will take time to grow, but as soon as the economy recovers you can get back to adding luxuries to your lifestyle.

While you are still earning a salary look for extra expenses that you can rather put towards your savings. These may include an extra movie a month, eating out less often, fewer nights out drinking, shorter time spent in the pub when you do go out, etc. Focus on home entertainment and wholesome home-cooked meals and save the extra dollars each month. You'll be amazed how quickly they can grow.

It's important to have a spending plan each month. The idea of a spending plan is to begin to think about what you can spend instead of what you can not spend. This gives you a much more positive attitude when handling your money, while ensuring you become aware of just how much you have to spend.

Sort your spending plan into areas of essentials and non-essentials or luxuries. Essentials would include rent, food, medical bills, as well as life and car insurance. Non essentials would be entertainment, clothing and lifestyle items. Do you really need a new kettle or will a good scrub revive it to its former glory? If you have an allocation in your monthly household expenses for the kettle, think twice about whether it's worth it.

There are other expenses that can be addressed with thought and creativity. Adding to your savings portion each month is quite possible, once you have drawn up a realistic savings plan and are willing to invest in a little creativity.

When you have accumulated savings that will cover your essential living expenses for the next six to nine months you can take a small percentage of your banked savings and speculate in higher interest bearing instruments. These vary in risk and return where typically the higher risk will yield the higher return. It's a good idea to have a financial planner assess your risk profile before you begin. This profile will be based on criteria such as marital status, number of dependents, debt levels, age and lifestyle.

Some of the safest investments opportunities can be found in unit trusts. These are sorted into various risk categories. These are quite safe and flexible investments because they can be bought as a lump sum or as a portion of the unit trust fund with a fixed amount every month.

It is a good idea to understand the composition of the unit trust which will be various equities selected for the specific profile of the unit. However this is not essential as the unit trust manager is the expert on the fund and it is in his/her best interests to make positive returns for their clients.

Unit trusts are a safe investment and usually return interest at a rate that is higher than the average market rate. This is good place to begin your investment education before tackling any stock market directly.

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