A Penny Saved...
No matter how little money you earn, you can afford to save, and no matter how much money you earn, you can't afford not to save. Everyone knows the story of the athlete or singer who's hot for awhile, makes lots of money, spends it like it's going out of style, and when his fame dies out, his bank account's empty and he's back where he started. Sad but true. On the other hand, there are those hard-working individuals who never make much money, but spend carefully and save all their lives and end up millionaires. That's because when you have money, it makes money for you through interest and smart investing. Even if you're already in debt, you should start saving while you pay off your debts. The younger you start saving, the longer that money has to grow, and the more you end up with from the same initial investment. Smart people save.
How Much Should You Save?
At least 10% of your income should be put away. More if you can afford it, and the more the better. Making more money is not how you get rich. Saving more money is how you get rich. Decide what you want to save for and designate a percentage of your income to put away for that purpose. One thing everyone should be saving for is retirement. There's also the down payment for a home, a car, college, childbirth, a vacation, a rainy day, or any number of other things to save for. Commit to a savings plan and put that money away every paycheck. You'll be glad you did!
Where to Keep your Savings
There are lots of saving options, each with its pros and cons. Banks and investment firms offer accounts specifically designed for saving for retirement and college. The plus side is that they offer better interest rates than a regular savings account, you can often deposit money pre-tax directly from your paycheck, and you can't take the money out early without penalty, so you're less likely to cave to frivolous spending desires. The con is that you can't take the money early without penalty if you really do need it. The smart choice is to use these accounts for part of your savings, the part you're pretty sure you can do without. Keep the rest of your money in a more accesible, lower-interest savings account like a money market account or regular savings, but make sure and keep it seperate from the account you use for regular spending. If your employer has a 401k or 403b savings plan set up, and especially if they offer match your contributions, make sure you take advantage of that and opt in! Contribute at least as much as they match. Usually it takes working for the same company a few years for their contributions to be fully "vested" meaning you get to take them with you when you go, but that can be a great way to maximize your saving efforts.