America Saves Week is here! America Saves Week is an annual celebration and call to action for every American to commit to saving successfully. So, how can you start saving?
When I think of saving automatically, I initially think of setting up a direct deposit from my payroll to my savings account each pay period and forgetting about it, but did you know there are other ways to save automatically?
- Retirement. Set up an auto-deferral to your 401k.
- Use your debit card. Check with your bank to see if they offer a round-up program. Southern Bancorp has Round-Up Savings, which will round-up your purchase to the nearest dollar or amount of your choosing and transfer the difference to a savings account.
- Set up your own auto-transfer. Most online banking products will allow you to set up transfers between accounts.
- Credit Card Rewards. If you have a credit card, check to see if they have cash back rewards. If you use that credit card properly by paying it off each month, you can see those rewards build. Depending on the credit card, you could use your rewards towards travel, gift cards, a statement credit, or cash back to your checking or savings account.
- Automatic Debt Payments. Many people tend to think that by paying debt; you are spending – not saving. By setting up an automatic payment towards debt, you can save on interest.
Save with a Plan
Having a plan will help you save. Here are some quick tips to develop your plan.
- Decide on an amount. Whether it is a percentage or a set dollar amount, this is the first step.
- Determine when and how often you can save this amount. Direct deposits and automatic transfers make this easier.
- Establish savings buckets. If you know what your savings is for, you can budget within your savings.
- Budget everything. List your savings as a fixed item in your budget. Be sure to include everything you have to pay during the month and then if there is any left over, save that too.
- Review. Revisit your plan often.
*Super Saver Tip: Take the America Saves Pledge to help create your savings plan. You’ll also receive support throughout the year to help you stick with the plan.
Save for the Unexpected
An emergency fund is necessary. By developing an emergency fund, you will be better prepared for whatever comes your way.
- Determine a smaller goal amount to save. Once you hit that, build it up to 3 to 6 months of required expenses.
- Use it for only true emergencies. For example, an unexpected repair to your home or car.
- Replenish when you can. If you have to use some or all of your emergency fund, be sure and replenish it when you are back on your feet.
Save to Retire
Even if you are many years from retirement, saving for retirement is necessary. You know that you will eventually retire and what better time to save than now? By saving now, you can earn interest on those dollars and have more to look forward to when that time comes.
- Choose the best retirement account for you. Talk to your accountant or investor and decide the type of account that will not only benefit you now, but also at retirement.
- Determine how much you will need for retirement and contribute accordingly.
- Take advantage of tax savings. By contributing to a retirement account, you could be saving in tax dollars now.
- Don’t leave free money behind. Take advantage of any match that your employer may give.
- Keep an eye on your retirement account. Not paying attention to your account can be as dangerous as not contributing at all.
Save by Reducing Debt
I mentioned this before. By paying towards debt, you can save by paying less interest. Here are some ways that you save through paying off your debt.
- Make a list of all of your debt. List the interest rate, balance, payment amount, and if it has one, the payoff date.
- Make all of your regular payments on time to avoid late charges and more interest.
- Make extra payments towards the debt that falls into one of the following categories first: lowest balance, highest interest rate, or promotional due date (O% or Low Interest Promotions.) By paying off one account, you can create a snowball effect and use that payment towards another debt.
Save as a Family
Not only will saving as a family benefit you, but it will also benefit your children by teaching them how to save.
- Savings Accounts. Open a minor savings account for your child and regularly deposit to it. You can also deposit any monetary gifts that your child gets through the year to that account as well.
- Plan your
meals and your grocery shopping. By planning your meals for the week (or
two,) you can then do your grocery shopping all at once. I tend to plan my
meals weekly, so that fresh meats and produce stay fresh.
- Utilize a free meal planner online, use your planner, or print a calendar.
- Make your grocery list based on meal needs as well as other household needs.
- Shop online and pick up at the store. This will save you time and money.
- Use coupons when you can.
- Buy in bulk and stock up on sale items when you know that you will need them soon.
- Entertain at Home. Some of my favorite memories with my family are the free ones. A movie or game night at home or a trip to the park or library cannot only save you money but can allow for more quality time than a trip to the movies or bowling alley. The same holds true for vacations. Find some free fun options to do during your trip.
- Plan ahead for birthdays and Christmas. Save a little each month and deposit the money into a separate account, like a Christmas Club account. Another way to save is by keeping an eye out for deals throughout the year.