Most people could do with trying to save a few dollars. If you are in debt then the imperative to save money is great and certainly urgent. Any savings can be automatically transferred to pay off your debt - which is a positive step to financial freedom.

IN PICTURES: How To Make Your First $1 Million

If you are not in debt you may be among the thousands of Americans who have absolutely no savings at all. The financial worries in the current economic climate might well be eased if there was a 'back-up' plan sitting in the bank.

If you had savings, it would cushion the difference between your income and your expenses, especially if you or a partner suddenly lost a job, for example. As a target, you should try to have three-to-six months income saved in an emergency fund. But how do you go about doing this? If every month you are counting the days until payday, it can be difficult to make cutbacks. Here we will outline five things that you can do straight away to start that savings fund

401ks
Consider reducing your 401(k) contributions and instead put that money away in savings. Continue to contribute enough money to your company's 401(k) to receive the matching contribution, if they offer it - but if you don't have sufficient cash savings, don't put in any more than that amount. Don't suspend 401(k) contributions altogether, because it's still tax-deferred savings, which is a big bonus. (Roth conversions will be available to affluent taxpayers in 2010. Will you benefit? Read The Simple Tax Math Of Roth Conversions.)

You Don't Miss What You Never Had
Siphon off a percentage of your salary at the start of the month into savings. In fact, some companies will allow you to make direct deposits from your paycheck into savings. Ask your employer if you can designate several accounts for your paycheck, and take advantage of this option. See if you can manage to save 10% of your monthly salary - you'll be surprised at how you'll get along without it.

Save the Extras
Do you have a tax rebate? Have you recently had a raise at work or received monetary gifts? Pretend you never received it - however large or small. You didn't have or need that money before, so don't depend on it now. Use an income tax refund, if you're fortunate enough to get one, as the start of your savings pot. Start seeing any extras as welcome additions to the savings fund.

Turn Off the lights
Get the whole family involved on a mission to decrease your electricity bill. Turn off the lights when you are not in the room, unplug the television and stop leaving things on standby, and you will notice the bill decrease. To really make a sizable saving - turn down your thermostat just two degrees and you could save thousands on your annual heating bill. For each degree you turn down the thermostat in the winter, you can save as much as 5% on your heating costs. (Learn more in Taking Your Home "Off The Grid") And remember don't spend this 5% saving - put it straight into the bank.

Get Bank Aware
Did you know that many banks are currently paying 0% on savings? If you don't know if your bank is one of them - you need to find out. Call them up right now and make the inquiry. If they are not paying you any interest on savings then you need to move banks. Many people are blindly loyal to their bank. Your bank is not loyal to you - if you are overdrawn or miss a payment, they are unlikely to consider your lengthy courtship.

Because banks are so keen for our business, they make switching to them very easy, and will often complete all of the paperwork and processes on your behalf. Do not have any savings sitting around and earning no interest whatsoever. (Get a better understanding of your account costs in 5 Bank Fees You May Not Know About.)

The Bottom Line
By starting today and following these steps, you can easily have one month's expenses saved before long. Once you have achieved this, you can take steps to getting three-to-six times this into that savings account. You'll be delighted you've done it.

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