Protect Your Pocket Series

America Saves Week

(originally published February 2009)

One of the items on display in my office at the Statehouse is a piggy bank, but not just any piggy bank. This one is unique in that it demonstrates the four main uses of money: save, spend, donate and invest. Unlike traditional piggy banks that have just one slot for coins, this bank, created by Money Savvy Generation, allows children to distribute their allowance between the four uses based on their wants and needs. In doing so, this modified piggy bank helps children build basic money management skills, like creating a budget and building wealth, not debt, at a young age.

Build wealth, not debt. It’s a concept simple enough it can be taught to children. Yet, on average, Americans save a negative amount of dollars every year. Only recently has the average personal savings rate, which calculates the amount of personal income not spent, climbed above zero percent. Regardless of the kind of economy we’re in, Hoosiers need to make saving a priority in their lives. Doing so will help us avoid or recover faster from future economic slides.

America Saves Week, Feb. 22 through March 1, is a national initiative to motivate consumers to commit to saving their money and building wealth. During America Saves Week, individuals are encouraged to evaluate whether or not they are adequately saving for the future and to take action to better their money management skills to avoid falling into debt.

One of the first steps to becoming a more sensible saver is having a plan for your money. When creating a budget, first calculate your monthly income. Next, estimate how much your monthly expenses will be and how much you can set aside to save. It’s important to save and spend within your means, but in general, about 10 percent of your monthly income should go to savings. For tips on creating a budget, visit

In addition to setting aside a specific amount of your monthly income for savings, utilize employer matching plans like a 401(k) program or set up an Individual Retirement Account (IRA), if possible a Roth IRA, to start saving for your future today. To determine how much money you will need to retire and how much you should save each month to accumulate that amount, use the AARP’s retirement calculators, which you can find at

When it comes to building wealth, it’s better to start saving early. The sooner you start putting money into a savings account, the more you benefit from compound interest, or interest that grows on the initial investment and the accumulated interest of that principal. For example, if you began saving $100 a month at 8 percent interest when you were 21-years-old, after 30 years your account would be worth more than $140,000. However, if you wait until you are 30-years-old to start saving, your account would only be worth $63,000 after 30 years.

It’s also important for today’s youth to understand the significance of saving. Most teens know how to spend money, but what about saving it? Parents can teach their children money management skills at an early age not just by giving them an allowance, but by explaining the various things they can do with that money in addition to spending it.

Make a point to build wealth and tackle your debt during American Saves Week and throughout the year. For more tips on improving your saving habits, visit To learn more about the Money Savvy Generation piggy bank in my office and how to get one, visit

Related Information:

- Learn more about saving at Practical Money Skills for Life

- Learn more about America Saves Week

- Learn more about the Money Savvy Generation

- Contact the Securities Division