By Brian Hepp

Recent statistics show that Americans are not doing a very good job of saving. The U.S. Department of Commerce continues to report a negative national personal savings rate and the December 2006 A.G. Edwards Nest Egg Score survey found that, while 64 percent of adults have a retirement plan in place, solid savings habits don’t seem to kick in until people reach the age of 40.

To help ensure that you get started early enough, make financial fitness your goal this year and take advantage of both new and old ways to maximize your savings.

PAY OFF CREDIT CARD DEBT

When the credit card bills come due and it’s time to pay for those gift-buying spending sprees, pay it off — or pay as much as you can on the total bill. You should get in the habit of using your credit card only as a convenience, rather than letting a balance float, and you should make every effort to pay it off each month. It may be difficult, but with some credit card interest rates exceeding 20 percent, it is in your best interest to pay down or pay off your debt as soon as possible.

CREATE A “RAINY DAY” LIQUID SAVINGS VEHICLE

It is always a good idea to plan ahead in case of an emergency. Surprisingly, most Americans fail to do this. In fact, when the Nest Egg Score survey asked what people do with leftover cash after fixed and day-to-day expenses are paid each month, only 18 percent say they would set it aside in a “rainy day” emergency fund.

Open an account today and regularly contribute to it so you can be financially prepared for the unexpected.

In a time of low personal savings, it will be helpful if you set some solid financial goals for yourself so you can make the most out of your hard-earned money — and even make it work for you.

MAX OUT TAX-DEFERRED SAVINGS

Make the maximum contribution to tax-deferred plans such as your 401(k) and IRA to reap all the benefits of these valuable savings vehicles. That means putting up to $4,000 per year into an IRA (either a Roth or a traditional) and up to $15,500 per year into a 401(k). Keep in mind that some income restrictions do apply to the ability to contribute to these accounts.

BE AN IRA EARLY BIRD

If you plan to contribute to an IRA for 2007, make the contribution at the beginning of the tax year. That way, you will benefit from a full 15 months of tax-deferred accumulation that you would have missed had you waited until the deadline in April of 2008 to invest. And, if you qualify, you’ll still get the same tax break in the end.

These are just a few of the things that can give you a head start on your savings goals. Make a commitment to do the little things now that will get you in the habit of saving — not just this year, but into the future as well.

Brian Hepp is a financial consultant for Santa Monica-based A.G. Edwards & Sons, Inc. He can be reached at (310) 453-0077 or brian.hepp@agedwards.com.