Last night I ordered a pizza at half price from a local pizza place because I wanted a treat. I saved my coupon from the back of a grocery store receipt. Some places that offer deals from the back of receipts are not that enticing to me.

Even though I paid half price for the pizza, I tipped the driver based on the full price of the pizza. I do the same thing when I use a coupon in a restaurant. This is only fair. The server still gave you service even if you received a discount on what you received.

So if you are in an area where you are enduring a storm like we are in the Chicago area and decide to order food in tonight, use a coupon but don’t stiff your delivery person. If you do, you are being cheap, not frugal. The delivery person has to survive too!

Also, if you save a coupon that you really are going to use or pass it on to a friend who you know will use it, you are being frugal and understand the value of money. If you buy something that you don’t really like just a save a few dollars, you’re not.

Some concern also has been expressed that an unusually low personal saving rate may pose problems for the economy in the short run, if it were to be quickly reversed, thus representing fundamental behavioral instabilities in the economy. Such a view would be consistent with the notion that households have imprudently financed the consumption boom by running up an unsustainable level of consumer debt. Consider, for example, that the principal strength of the U.S. economy during the current recession (apart from housing) has been the remarkable resilience of household consumption. Had there been a sudden unpredictable reversal of the personal saving rate, then by definition, consumption would have fallen, which could have significantly exacerbated both the depth and duration of the recession.

This was published in 2002 by the Federal Reserve Bank of San Francisco, but it certainly applies today.

Sounds frightening. We aren’t saving enough and we have quickly reversed this position as a nation. People have been spending money like water and not putting enough or even worse any aside. Yesterday, another indicator that does not bode well for the US economy is that people are not repaying their home equity line of credit loans.. Using your home as a piggy bank is not as easy as it was a year or even six months ago. But now people having difficulty repaying their loans.

 According to the U.S. Department of Commerce, “personal saving as a percentage of disposable personal income was a 0.2 percent in December.” The report goes on to say that the personal saving rate may actually be negative because may be using the savings after Christmas or going into debt to fund their savings (e.g. HELOC). “Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods.”

To make this more realistic, if you had a salary of 50K annually your savings would be $100. What should a good savings rate be? People are living longer and if you plan to have some money to live off of comfortably for a while you would need to have some investments but you would still need to have some savings now for unforseen expenses or emergencies.

A good rule would be to save about 10% of your income for the future. This may be on the conservative side or it may not be enough. First you need to assess what you would like to do in the future. If you want to travel when you get older, or want to have your home paid for, then start working toward that goal. You may want to set aside money for a child’s college fund. Each person’s goals and needs are different.

Saving doesn’t really help is you have a lot of credit card debt or other high interest debt that you need to pay for. Before adding more money to your mortgage principal, pay down your high credit card debt and make minimum contributions to any 401K or 403(b) plans that offer matching funds up to a certain percentage. This will definitely help, but you need to know how you would like to live in the future before you can decide how much you should save.