Every quarter my bank sends out a quarterly newsletter with money saving tips and and additional tips on money management. Here are a few of the tips from this quarter’s newsletter, with a few additional comments and links to help you better manage your money. Oh, and if you aren’t using a high yield savings account for your savings and emergency fund, I highly recommend it!

Money management tips and tips to save money

Keep a record of where your money goes. Look at your spending over the past three months. Leave nothing out. And then, cut expenses where you can. Creating a budget is a good place to start. You can also use a free online money management tool like Quicken Online to help manage your money. Here is a Quicken Online review for more information.

Change your energy consumption habits. Turn your thermostat down five degrees and save 10% in fuel costs. While you’re at it, consider installing a programmable thermostat to help you save money. The $30 investment should easily pay for itself in a few months. Here are some more tips on saving money on heating costs and saving money on air conditioning costs.

Watch what you spend for food. I bring my lunch to work most days, which saves me a lot of money in the long run. The food also tastes better and is better for me. Win-win-win situation!

Establish an emergency savings fund. ING Direct recommends saving enough money to cover three to six months of expenses. I think this is an excellent idea. Your best bet is to keep your savings in a high yield savings account so you can earn extra money on your savings. While you’re at it – make sure your savings and checking accounts are FDIC-insured.

Check your tax return. If you didn’t qualify for the 2008 financial stimulus and your income has decreased, you may be eligible for a “recovery rebate credit” when you file your 2008 tax return.

Increase your retirement savings. Increase your IRA or 401(k) contributions if retirement is still several years out (you should be putting away 10% to 15% of your income). Retirement contribution limits have increased for 2009 so increase your contributions if you can afford to.

Improve your credit score. Your credit score is extremely important and can affect many aspects of your financial life. Improving your credit score can help you save money in other areas as well, including insurance and loans.

Hopefully these tips can help you save money and improve your money management skills!

This article is a guest article by The Dough Roller, who writes about managing money in an online world. I encourage you to visit his site.

We get this question a lot. A family has a few hundred dollars extra each month, and they want to know what they should do with it. For many families, the choices include paying off high interest credit card debt, putting the money in a savings account, or adding it to a retirement fund such as a 401(k) or IRA. So let’s take a look at these options and some factors to consider when deciding what to do with your extra cash.

The Dave Ramsey Approach

Let’s start with how Dave Ramsey would answer this question. His advice is to first save a $1,000 emergency fund in an online high yield savings account or other FDIC insured account. Once you’ve saved $1,000, then you pay off all of your non-mortgage debt. Only after all this debt is paid off do you begin investing 15% of your pay in retirement accounts.

Many people have followed Dave’s advice to financial freedom. It certainly is a conservative approach, and very easy to follow. For me personally, I’d never been comfortable with an emergency fund of just $1,000. And if I waited to pay off all my non-mortgage debt before investing for retirement, I’d give up a 7% company match on my 401(k). So while I think Dave Ramsey’s approach is a good one, in my opinion it’s not the only good approach.

So let’s look at some other factors to consider.

Interest Rates

This may seem obvious, but the interest rate you are paying on your credit cards may dictate what you do. If you are paying 15% or 20% on cards, they should be a top priority. At a minimum, you should take advantage of 0 APR balance transfer credit cards to keep the cost down while you pay off the debt. If your credit card debt is already on zero interest or low interest cards, then your choice may not be as clear.

Emergency Fund

Everybody needs an emergency fund. An emergency fund is what distinguishes between those that live paycheck to paycheck, and those that don’t. Even one month’s worth of expenses gives a family some breathing room in case the unexpected happens.

Dave Ramsey’s approach is to save $1,000. For me, that is not near enough to let me sleep well at night. Many suggest three to six months, depending on whether both spouses work or not. I think every situation is different, and you need to decide for yourself what is best. For me, I’d prefer one full year with of expenses, although I wouldn’t wait to save that much before tackling credit card debt.

Matching Funds

If your employer matches retirement contributions, contributing at least enough to take advantage of the match is wise. In the worst case scenario, you can always borrow from or withdraw retirement funds. Yes, there will be a penalty if you withdraw retirement funds in most situations, but for me, that is worth the risk in return for free matching funds.

Putting it all together

So when it’s all said and done, here’s my approach to the question of whether to pay down debt, save, or invest your extra money:

• Save for an emergency fund first. You don’t have to reach your complete goal for the fund before paying off debt or investing, but you should have one or two months of expenses saved initially.
• Contribute enough to your retirement accounts to take advantage of any matching contributions.
• Begin paying off non-mortgage debt, starting with the debt with the highest interest rate
• Remember that this is not an all or nothing proposition. You can take some of the money to pay down debt, while using some of it to save an emergency fund or invest for retirement.