"Saving" is often referred to as if it were a skill, a frame of mind or a lifestyle, like martial arts or plumbing, which some people can do and others simply can’t. In reality, it is very easy to become a "saver". Banks, building societies and even supermarkets now offer accounts.

How much should you save?

Experts suggest that you should have at least three times your salary squirrelled away for emergency costs.

It is much better to have a pot of cash to draw on than resort to credit cards or loans, which can prove to be expensive, especially at short notice.

How to save

BACKGROUND

• The beginner's guide to Child Trust Funds

• National Savings & Investments explained

• How to budget

BACKGROUND

• The beginner's guide to current accounts

• How to reclaim bank charges

• Bonds explained

Some people will also want to save for something specific - a car, a deposit on a flat or a new washing machine. Others may simply wish to get into the habit of saving regularly.

Either way, use the budget calculator on the Financial Services Authority website Money Made Clear to work out how much you can afford to put away.

If you aren't already saving money into a pension, the advice is simple. Start now. Even a seemingly insignificant contribution will have longer to grow in value before you retire, and is worth far more than contributions made later in your life.

Where to save

There are seemingly endless ways you can store your cash: premium bonds, investments, instant access accounts, Isas. Each have different features.

One of the easiest way to save is to set up a standing order, which will transfer money from your current account to a savings account automatically each month. Make sure you are not too ambitious about how much you can afford to transfer over. There is no point going into the red and paying a £35 charge because you moved too much of you cash to savings.

You can set up sweep facilities on some accounts which will move any money left over in your main account to your savings before payday. Ask your bank if it offers the service.

Rewards for savings

Your bank will offer you an incentive for saving money in the form of attractive rates of interest, helping your pot of cash to grow even when you aren't contributing.

Interest rates vary hugely, and often fall over time, so it is worth keeping an eye on your account and even switching ever year or two to make sure you are getting the best rates, usually reserved for new customers.

Check comparison websites such as Moneyfacts.co.uk or Moneysupermarket.co.uk.

Tax on savings

In most cases, the interest that you earn on your savings is taxed at either a basic or higher rate, depending on how much you earn.

However individual savings accounts (Isas) and some accounts from National Savings & Investments (NS&I) are tax-free, meaning HM Revenue & Customs doesn't get any of it.

The amount you can place in a cash or stocks and shares Isa is limited to £7,200, half of which can be invested in a cash Isa. This is being increased to £10,200 for people over the age of 50 from October 6. This higher limit will be extended to everyone else from April 2010.

Always use up your Isa allowance as it is the most efficient way to save. Interest rates on Cash Isas are often very competitive.

There are a range of taxable accounts which will return varying levels of interest on your cash, often depending on how regularly you are allowed access to your money.

Fixed rate bonds, which lock your money away for one, three or fives years, for example, often offer the best rates. Instant access accounts, with unlimited access to your funds, pay the lowest.

Stock market savings

In the long term, you could also consider investing in the stock market, which generally outperforms cash deposits. The easiest way to do this is to opt for a fund. These are run by a fund managers, who pick the best stocks to invest in to maximise growth. Most banks offer investment funds, but stockbrokers and asset managers often provide better value and performance.

There are also specialist accounts for those savings for children, include the government-backed child trust funds, wanting to start a pension or saving for something specific, for example a deposit on a house or for Christmas.

When should you save?

Saving is all well and good but if you are in debt, some experts suggest clearing this first. It is worth sitting down and doing your sums.

There are a number of savings planners on the internet. Work out the interest you will earn on your savings and compare it to the cost of your debt. If the debt is more expensive, you could divert all your cash to clearing it.

Other experts would be cautious about using all your savings to clear debt. In an emergency or if there is something that you need, without savings the likelihood is that you will only get more in debt to pay for it.

A measured approach, where you focus on debt while also saving a small amount each month, could be the best way to manage your money.

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Five websites

Moneyfacts.co.uk

Moneysupermarket.co.uk

Fool.co.uk

Moneymadeclear

Direct.gov.uk