This past week was designated as America Saves Week, which is an annual call to action for everyday Americans to commit to saving successfully. In honor of this event, which is now in its 13th year, certified financial planner Suzanne Himes is here with some tips and strategies for our own savings goals.
SUZANNE, WE KNOW WE SHOULD BE SAVING BUT IT’S EASY FOR UNEXPECTED EVENTS TO GET IN THE WAY ISN’T IT?
Yes! Life often challenges us to re-confirm our financial priorities, so it’s helpful to have some personal policies in advance around our spending and saving.
- Save at least 50% of new “found money” (cash gifts, tax refunds, pay raises & bonuses)
- 24-hour waiting rule for impulse buys over a certain $ amount
- Limit vehicle loans to 4 years
- Keep cell phones at least 3 years
WHAT ARE SOME OTHER RECOMMENDATIONS TO HELP KEEP US ON TRACK?
Tips for successful saving:
- Set specific goals
- Make savings automatic; pay yourself first
- Have a “savings buddy” to share progress, give each other support. This is also the concept behind the America Saves Pledge – can sign up to receive reminders and tips for savings goals.
- Maintain a basic emergency fund to help keep other savings goals on course
- Track non-essential spending to help with money “leaks”
ARE THERE THINGS WE SHOULD BE THINKING ABOUT FOR OUR LONGER-TERM SAVINGS?
- Take advantage of tax-free growth over time when possible:
- 529 Plans for education savings
- Roth IRAs for retirement
- Health Savings Accounts for future health care expenses
- Invest to keep up with inflation
FAST MARKET FACT: U.S. Personal Savings Rates
- 10% or higher until mid 1980’s
- 1971 – 60 year high 13.5%
- 2005 – 60 year low 3.2%
- 2012 8.8%
- 2019 8.0%