Saving During Tough Times: Five Questions to Ask Yourself

Some of these people are saving half their income -- how much should you save?

ByABC News
June 12, 2009, 10:57 AM

June 17, 2009— -- As job anxiety bubbles up in workplaces across America, Laurie Holgate is preparing for the worst-case scenario: getting laid off.

"Everyone is paranoid," she said. "We hired so many people the last couple of years and everyone is looking around to see who it's going to be."

As a project manager at a large HVAC company in Seattle, Wa. that installs and designs heating and air conditioning systems, Holgate, 50, says they're not bidding on new projects because there are none.

In March personal finance queen Suze Orman appeared on Oprah, challenging everyone in the audience, whether single or in a dual-income household, to save half of their monthly income for six months. It was part of her "recession rescue plan." The idea was simple: start saving now, before your income takes a hit.

"When you are freaked out, that is not the time that you go through your expenses and go, 'Should I cut here?'" she said on the show.

Viewers wrote in to the message boards after the show, complaining that they are already stretched to the limit, and that "living on half" isn't a practical solution.

But Orman asks, "What would happen if you lost your job and all you had was unemployment – if you even qualify?"

In an interview with, Orman said, "If you do lose your job you will be shocked at how much more you will cut back."

One of the keys to building wealth, she says, is to continue to live the same lifestyle, even after getting a promotion or a higher salary.

"It's almost as if the more you make the more you spend," Orman said. "If people continue to spend who don't have money then we end up in situation where taxpayers support those people. When they get into trouble now we have serious problems and it's you taxpayers who have paid for the outfits in that person's closet."

Soon Holgate's company will undergo massive downsizing among its union employees that work in the field. Next year, if Holgate doesn't have another project to oversee, she fears her job will be on the line, too.

So, as she awaits news of her fate, she's increasing her savings.

She and her boyfriend earn a combined $70,000, which has allowed them to live comfortably, but in September of last year, Holgate's worries drove her to start banking half her paycheck.

Before she only saved $100 every week and now that's up to $300. No more getting her nails done and, as she said, "no more fun."

"I don't go out to dinner, don't buy any clothes for work, I'm trying to save every penny that I can," she said. "We've cut out so much. I was trying to get to the point where I would have enough to make house payments for a year [without working]."

Fortunately for Holgate, she reached her goal this year, and now has some peace of mind. "I'm not as worried about money as I used to be – I know I can survive – I'm not making unnecessary purchases."

But figuring out how much to save each month can be tough, especially during a recession when you're afraid your job might be on the line. Dayana Yochim, a personal finance expert at says there are five things to ask yourself.

1) Who Are Your Dependents?

2) What Industry Do You Work In?

3) Where Do You Live?

4) If You Lost Your Job, What Would You Be Willing to Do?

5) Do You Have Access to Credit?

Plus, learn how your saving plan ought to be structured, and what to do if you haven't saved anything yet.