Automatic investment plans make saving easier

— -- The nation's savings rate soared to 4.5% in June, according to the Bureau of Economic Analysis, which can mean only one thing: We have been invaded by Venusian Brain Garglers and now live to serve our alien overlords.

Of course, it may also mean that people are worried about the economy and are paying down debts and setting aside cash for a rainy day. Economists prefer the latter explanation. For whatever reason, if you're thinking about starting a savings plan, consider an automatic investment plan.

The USA — once the home of the most profligate spenders in the galaxy — seems to be becoming a nation of savers again. The savings rate had fallen below zero in 2006, the lowest since the Great Depression.

Is this a long-term trend, or simply a reaction to current events? "I hope there's some permanent change," says Eleanor Blayney, consumer advocate for the Certified Financial Planner Board of Standards. "It's too early to tell." A recent survey by the organization, however, shows that 53% of all consumers list "managing/reducing current debt" as a major financial-planning issue. An additional 47% list "building an emergency fund" as a priority.

Saving money, like losing weight, is something that often sounds easier than it is. Car repairs and blown water mains will devour a savings account.

It's best if your savings never hits your bank account, which is why a 401(k) is a good solution. Two other reasons to fund your 401(k):

•Uncle Sam makes it easier to save. Let's say you're in the 25% tax bracket. If you want to save $100, you have to earn $133 before taxes. Because your 401(k) contributions are before taxes, however, your $100 goes straight to savings.

•Company contributions turbocharge your savings. If your company matches 50 cents on the dollar, you've got a 50% gain, which wipes away many investment sins.

The drawback to a 401(k), however, is that you will generally face steep tax penalties if you withdraw money before age 59½. You may want a savings account that's a bit more accessible in an emergency — or, if you're young, by middle age.