Regular saving, even of small amounts, makes the most sense. Don't put it off until you have "extra" money to put away. The easiest and most painless way to do this is to take decision out of the equation by making saving automatic. That way, you're less likely to be torn between saving and splurging. And you don't have to remember to save. It just happens.
The easiest way to automate savings is to have part of your paycheck deposited directly into your savings account. Working with your company's accounts payable department, you usually can direct your bank to put a portion of your pay into checking and the rest -- say, $50 or $100 per week -- into savings. That's it. Every week, you'll be saving money without even thinking about it. And you'll be surprised at how quickly your savings accumulates.
If your employer offers a 401(k) retirement plan, you'll have an even better opportunity for saving for the future. Once you sign up for a 401(k), all you do is decide how much money you want to contribute to your plan from your pay. That amount goes into an investment plan of your choice and is not taxed. Many employers make additional, matching contributions as well, so your retirement savings add up even faster. You can learn more about these plans in How 401k Plans Work.
However, don't overestimate how much you can afford to save on a regular basis. It's better to save a little less than to raid your savings account on a regular basis -- or to pay a penalty for drawing money out of your 401(k) plan early. For more tips on building up your savings, check out the links on the next page.