Spending less and saving more is one of the top three New Year's Resolutions this year, but now that we're almost one-sixth of the way through 2016, most of us have long forgotten those pesky resolutions. (Except when the gym membership comes out of your account each month.) Just in time for spring, America Saves Week (#ASW2016) is here to get us back on track.
According to America Saves, less than half of Americans regularly save at least 5% of their income and only 43% have an automatic savings plan outside of work. Saving for a big purchase, or college, or even retirement is a marathon, not a sprint. You can't just decide to do it a few days before the event. With that in mind, here are a few tips to get you stated on your savings journey.
- Identify a Goal - Saving money is easier when you can visualize the outcome. Whether you are saving for a special vacation, a sweet new ride, or just an emergency fund, a goal will keep you motivated.
- Start Small - You don't have to start saving 20% of your income right away. Set aside small amounts you know you won't miss. Gradually increase the amount, until you find a level that is comforatble for you.
- Eliminate Expenses - Look at your spending to find areas you can cut back. Are you spending too much eating out each month? Are you actually going to use that gym membership? Examine where your money is going and cut back anything that is not adding value.
- Set It & Forget It - Automate your savings so you don't have to think about it. Setting up a monthly recurring transfer on payday will keep you from spending the money.
- Find the Right Financial Partner - Sit down and talk to your banker about your unique situation, and let them help you make a customized plan that allows you to achieve your savings goals.
- Find The Best Account - Many people start with a basic savings account, but there are other options that may work for some savers:
- Savings accounts - A basic savings account usually comes with few limitations, but offers a lower rate than other types of accounts. If you are just starting your savings and don't plan on making many withdrawals (which you shouldn't if saving is your goal!) this may be the best option.
- Money Market accounts - Not to be confused with money market indexes offered by brokerage firms, these bank accounts typcially pay a higher intersest rate and allow check access with a limited number of withdrawals.
- CDs - Certificates of Deposit offer a higher interest rate with more stipulations. CD interest rates generally increase depending on how long you are willing to tie up your money. Most CDs have early withdrawal penalties for closing the account before the maturity date.
- Interest Bearing Checking - Some checking accounts pay interest rates comparable to or even better than savings accounts. Just be sure you do not use your primary transaction account to save money. It will be too tempting to spend it!
Saving more doesn't have to be intimidating. Take the opportunity this week to review your situation and start your path to greater savings.
We would love to help you achieve your goals. Try our Calculators to determine how much you need to save to reach your goal or become a millionaire! Our savingss accounts and tools can help you reach those goals, including Smart Swipe, which rounds up your debit card purchases and transfers the change to your savings account for simple everyday savings. You can even open a new account online today if you're ready!
Happy Saving, America!
