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Planner Offers Strategy For Saving Amid Recession

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Mar 3, 2009 7:41 am US/Mountain

Planner Offers Strategy For Saving Amid Recession

Reporting
Jodi Brooks
DENVER (CBS4) ― The uncertainty of the stock market is prompting many people to pull their money out and start saving.

In 6 months the the personal savings rate has jumped from less than 1 percent to about 5 percent.

Kate Scott, Certified Financial Planner with Cherry Hills Investment Advisors, said there are a few strategies to consider when attempting to stay afloat.

"I think it's a better approach to save for things that you need and also have a cushion for emergencies. Right now if something comes up we throw it on a credit card."

Scott also offered this advice:

-- Consider when you need the cash; ladder the maturities of the CDs (3 months, 6 months, 1 year) based on your needs. Have at least 6 months of expenses available in readily accessible savings or CDs.

-- If you don't need the money for a while but want to stay out of stocks, consider Treasury Inflation Protected Securities (TIPs) or I-Series savings bonds. Inflation is low now but it won't stay that way.

-- Rather than buying individual TIPs you can buy an exchange-traded fund (ETF) such as iShares Barclay's TIPs (symbol TIP) or a mutual fund that owns the bonds (like Vanguard's Inflation Protected Bonds, symbol VIPSX)

For more information on these investments, go to:

Additional Resources

-- Visit cherryhillsadvisors.com -- the Web site of Kate Scott, CFP® with Cherry Hills Investment Advisors

Contact Us

CBS4 is looking for Colorado families who would be willing to be subjects of our Beating The Recession: Money Makeover series. Families who are interested getting financial advice -- free of charge -- from a financial advisor should please fill out our form to be considered.

(© MMIX CBS Television Stations, Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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