The way to build your savings is by spending less each month.

If you wait to see how much money you have left at the end of the month to put toward savings, the answer may be zero. So, set up an automated monthly transfer from your checking to savings account. Once you lock into that commitment, you'll be forced to scale back spending to make ends meet.

Pay off your mortgage before retirement, and that's one less bill you'll have to worry about when you're on a fixed income.

I'm a big advocate of a work-for-pay setup rather than an allowance that isn't attached to chores - it's a great way to impart the value of money to your children.

Money you know you need or want to spend in the next few years is savings. Money you keep handy for an emergency belongs in savings. Money you hope to use soon for a down payment on a house belongs in savings. And all savings belong in a low-risk bank savings account or money market account.

The advantage of online banking is that you can pay bills superfast, and your account is automatically credited or debited for each deposit and payment, making it easier to stay on track.