Building savings – not an easy task in the best of times – has become even more of a challenge since the recession. People who had their retirement savings invested in 401(k) plans saw 40 percent or more of their wealth evaporate in the 2008 meltdown.
Today, many people have watched their retirement savings recover somewhat, only to lose ground again due to jittery, unstable markets. But across America, families are finding that they don’t have to rely on Wall Street to save, and small businesses are finding ways to overcome the credit crunch and get the financing they need.
Many Americans are discovering Bank On Yourself, a savings strategy that has earned returns during every period of boom and bust for more than 100 years. This time-tested approach also provides a means for businesses to get financing when credit is tight. Walt Disney used it in 1953 to help start Disneyland, and J.C. Penney used it to help meet his company payroll after the 1929 market crash.

The Bank On Yourself method relies on dividend-paying whole life insurance policies that incorporate little-known riders or options that turbo-charge the growth of the cash value in the policy, especially in the early years of the policy. A properly designed policy could have up to 40 times more cash value in the first years than a traditionally designed whole life policy.

These policies are used by people of all ages and offer benefits for parents who wish to save for their children’s future. Some parents open policies for their children as a way to save money for college, or to help their children with a down payment on a car or a first home.

This saving strategy is also a great way for parents to teach their kids about finances and saving money responsibly. Young people can watch the value of their policies grow year by year and, when they get old enough, contribute their own savings.
The principles behind Bank On Yourself contain valuable lessons that many adults have forgotten or maybe never learned. Here are four tips to help families save:
1. Know the Difference between "Saving" and "Investing"
Wall Street and the financial planning industry have led us to believe that "saving" and "investing" are the same. They are not. Money put in savings is money a person doesn’t want to (or can't afford) to lose. Money invested is subject to loss. Most people today "invest to save," but they have no idea what their nest egg will be worth when they plan to tap into it.
The typical equity mutual fund investor has barely managed to eke out a 1 percent per year gain for the past 20 years, after adjusting for inflation, according to the research firm DALBAR. The bottom line: Money a person cannot afford to lose should not be invested in stocks, real estate or other traditional investments.
2. Don't Wait to Pay Down Debt Before Increasing Savings
Often people think they must pay down their credit card balances and other debt, before they can increase the amount they save. But that's not necessarily true.
Case in point: A woman in her fifties was paying $600 to $800 a month more than the minimum payment due on her credit cards. She discovered that by cutting back to the minimum payment and putting the difference into a Bank On Yourself-type policy, she could have a nest egg worth about $50,000 more than she otherwise would when she retires at age 65. I call this the "better than debt-free" way to manage money.
3. Look Beyond Traditional Saving and Investing Methods
Many people do not realize there are proven and time-tested ways to grow a substantial nest egg without the risk or volatility of stocks, mutual funds, real estate, and other investments. A dividend-paying whole life policy grows by a guaranteed and pre-set amount every year. The growth is exponential, meaning it gets more efficient every single year the policy is held. This gives some protection against inflation and provides peak growth at the time most people need it most — retirement. These policies also provide peace of mind for retirement planning because they specify the minimum guaranteed income a person can draw in retirement.
4. Realizing Savings Doesn't Always Have to Mean Sacrificing
Saving with this kind of specially designed dividend-paying whole life policy allows the policy holder to borrow equity and use it for needed major purchases. Some companies even offer policies that continue to grow as if no money had been withdrawn. This can open up all kinds of new possibilities for responsible savers.
As parents, one of our most important lessons for our children is to teach them to spend and save wisely. So why do so many of us gamble our hard-earned money in risky investments such as the stock market or real estate? By saving instead of gambling, we can provide for our financial future and teach our children the lifetime value of being financially responsible and self-sufficient.

Author's Bio: 

As a consultant to financial advisors, author and financial security expert, Pamela Yellen investigated more than 450 savings and retirement planning strategies before learning about Bank On Yourself, a proven alternative to the risk, volatility and unpredictability of traditional investing methods. This approach uses specially designed dividend-paying cash value whole life insurance policies to create secure savings plans for families who want to protect their financial future. She has helped train 200 Bank On Yourself Authorized Advisors throughout the US to help their clients implement this strategy properly. Pamela is the author of the New York Times best-selling book, BANK ON YOURSELF: The Life-Changing Secret to Growing and Protecting Your Financial Future. Learn more at