Cut corners, not 401(k) contributions

You don't need me to tell you that times are tough. After all, between the nightly news, the remaining newspapers in circulation, and the myriad of web sites, it would be hard to miss the reality of the ever-increasing unemployment rate, the higher frequency of foreclosures, and the generally lower level of consumer confidence.

All this news might make you want to cut back on spending to ensure yourself of a greater emergency fund should you personally experience a financial setback. But be careful of cutting back on your 401(k) contributions. If you have one, a 401(k) plan is one of the most important long-term saving vehicles available. Not only does your contribution save you taxes the very day you save, but you can also benefit from decades of tax-deferred growth.

Should your employer also offer you a match on your contribution, your failure to fully capitalize means you are forgoing free money. No matter the circumstances, that's never the right move.