April 20, 1998

Q. I often enjoy reading your column, but I don't know why. Let me explain. My wife is 57 and I am 51. I work for a social service agency and currently bring home about $175 a week. My wife is a front office manager for a hotel and brings home around $425. We have $350 in a savings account and about $500 in checking. With retirement out of the question -- ever -- I was wondering if you had any suggestions. I realize we hardly fit the normal profile of your readers, but I have a feeling that there are a lot more of ``us'' out there than ``them.''

M.M., Jackson, N.H.

A. Well, Andrew Carnegie was born, like all of us, with no pocket and without a dime to put in it. His first steps were small ones, and that's the way for you to begin. I realize that your budget is tight and saving probably seems nearly impossible. Try to work out a reasonable plan that you'll be able to stick to; don't worry about how modest it is at the beginning.

Perhaps your employer offers a program that allows you to buy US Savings Bonds through a direct withdrawal from your paycheck each week. If you were to join such a program and purchase one $50 (face value) bond each month, that would hack about $5.76 off your weekly take home -- is that something you could stand? If not, how about buying one $50 bond every other month, costing you $2.88 a week? If there's no such program, perhaps you could manage to pitch a few bucks every week into a sugar bowl, taking the cabbage to the bank and buying a $50 savings bond every time the pile reached $25. Following such a procedure would provide the twin advantages of getting the money out of sight before it grows into a tempting pile and putting it in an instrument -- the savings bond -- where you would be penalized if you cashed it in promptly.

Most people who advocate savings programs such as these testify that they find they don't miss the few dollars going into it -- especially if they can use a payroll deduction plan and they don't see the money. Once they have discovered this, they frequently find they can periodically raise the ante a few notches -- first going to six bucks, and then perhaps celebrating a raise by going to seven. And so forth.

I'm not saying that such a program is going to finance very much in the way of a retirement. But it will at least give you more financial security and ability to deal with emergencies than that $350 in savings. If you were to follow that $5.76-a-week plan doggedly, by the time you reach age 65 the value of your savings would be more than $6,000. And if your wife can and will follow a similar discipline, so much the better.