“I want to save, but I don’t have any money to set aside right now.”
Sound familiar? It’s one of the most common phrases we hear as bankers. But help is on the way! This week is “America Saves Week,” a full seven days of activities designed to help you learn how to save more of your hard-earned cash. The tips provided below are useful whether you have $1 to save or $100 to save. Here’s a breakdown of the themes for the week ahead:
Monday – Save Automatically
One of the easiest ways to save is to set up an automatic transfer from your paycheck or your primary checking account to a savings account. If the transfer is done automatically when money goes into your account (such as on payday), you may not even see it as spendable income. For example, if you are paid biweekly, setting up an automatic transfer of $25 from each paycheck into a savings account, will amount to $650 in just one year, not including the interest you’ll earn. It’s an excellent way to begin saving for the future.
Tuesday – Save with a Plan
“I will save more when I have money” or “I will start saving in the new year.”
In order to save to your highest potential, you’ll need a well thought out plan of action. Think about a strategy to begin your savings and commit to it. If your plan is to transfer $20 a week into your savings account, keep to that amount and avoid the temptation to pull that money because there’s a great shoe sale or you really want to go to the movies this weekend. Stick to your established plan and let your money continue to grow in your savings account for when you really need it.
Wednesday – Save for the Unexpected
Many people establish a monthly budget that uses the full amount of their paycheck to cover bills and expenses. While it’s crucial to ensure all your monthly obligations are covered, it’s also important to set aside money for unanticipated expenses such as medical bills, new appliances, and car repairs. Without a savings safety net, these unforeseen expenses can easily drive you deeper into debt. Just by skipping a morning coffee or going out for lunch and putting that money into a savings account, you’ll have funds available in case of emergency. You will be thankful when you can cover the expense without drastically adjusting your budget.
Thursday – Save to Retire
The earlier you start saving for retirement the better! Even though your eventual retirement may seem a long way off, it’s best to start saving for it as young as possible. Investing in an Individual Retirement Account (IRA) or your employer’s 401(k) plan while still in your 20s or 30s allows you to begin earning compound interest on your savings and lets your money work for you.
Friday – Save by Reducing Debt
There are many benefits to regularly reviewing your credit report, including using it to keep an eye on your outstanding debt. And it’s just that easy. Everyone is entitled to one free credit report each year (available only at www.annualcreditreport.com). Paying off a loan or credit card will allow you to redirect the amount of your monthly payment to your savings account. Since the funds are already figured into your monthly budget, you can just change it from a debt payment to a savings payment.
Saturday – Save as a Family
“The family that saves together stays together.”
Whether it’s a piggy bank or a child’s saving account, if you teach your children about the many advantages of saving now, it’s a habit they can carry with them into the future. Smart financial sense starts at home and it’s never too early to teach your children about the benefits of saving money.
Hopefully these tips will help you get started on your way to financial independence and a healthy balance in your new savings account. You can follow us on social media as we help spread awareness of the America Saves Week. (Facebook, Instagram, Twitter). Feel free to share ways that you and your family save money in the comments below!