It’s no secret that personal credit card debt is currently at an all-time high, and it keeps growing every day. And it probably won’t come as a surprise that the personal savings rate in the United States over the past few years has been at levels not seen since the Great Depression. Although some forms of debt may be necessary, allowing your debt to get out of control can rob you of valuable savings opportunities. Reining in credit card and other types of debt will allow you to focus your efforts on establishing and growing your financial nest egg. 
 As consumers today, we have many alternatives available to us to buy now and pay later. But while those offers may be tempting, we could learn a valuable lesson from previous generations who didn’t have access to some of these things. Saving money first is not only a good idea for avoiding going into debt for larger purchases, it’s also a good habit to get into for our finances in general.
Developing disciplined investment habits isn’t always easy, at least at first, but there are several things you can do to improve your savings routine. One of the easiest ways to establish a systematic savings plan is by taking advantage of the convenience of electronic funds transfer (EFT). You may be familiar with this type of service if you currently receive or make electronic deposits to your bank account. This service is also available from other financial services firms, and paying yourself first by using an EFT system can help you get in the habit of saving.
Direct deposit allows you the opportunity to deposit all or part of your paycheck into the account of your choice, so you could choose to set aside a certain portion of your pay to go directly to a savings account as opposed to your checking account. Another way to take advantage of EFT is to set up an automatic monthly deposit. This is a simple, disciplined way to add to your savings, authorizing a specific amount to be transferred from one of your accounts to another (i.e. from checking to a savings or investment account).
Many times people feel that if they can’t put away a considerable amount of money each month, then a savings program just won’t be worth it. In reality, you can accumulate funds and reach your investment goals by investing even just a modest amount – but the key is to be consistent. If you think such a simple strategy won’t make a significant difference, consider the following example.
Let’s say you decide to save just $50 per month in your savings plan. After 10 years, you would have saved a total of $6,000. However, if you had invested that money in a basic account that earned a six percent rate of return*, the value of your account after 10 years would be more than $8,000.
As you can tell from this example, saving just a small amount can be rewarding and get your finances on the right track. Avoiding debt in all forms may be a difficult proposition, but if you can keep it to a minimum and focus your efforts on simple savings strategies, your financial situation will be in better shape for it.
*This illustration is hypothetical, and the return is not representative of any specific product or service.
A.G. Edwards generally acts as a broker-dealer, but may act as an investment advisor on designated accounts, and the firm’s obligations will vary with the role it plays. When working with clients the firm generally acts as a broker-dealer unless specifically indicated in writing. To better understand the differences between brokerage and advisory services, please consult “Important Information About Your Relationship With A.G. Edwards” on agedwards.com.
This article was provided by A.G. Edwards. A.G. Edwards is a division of Wachovia Securities, LLC. Member SIPC.

"Educating my clients
is very important from day one of our relationship
along with on going
communication. If I know my clients
concerns or needs,
only then can I
successfully do my job."
- Tamara Alliston