Are You Saving Enough?
According to GOBankingRates, more than two-thirds of adult Americans have less than $1,000 in their savings accounts, and more than 50 percent of women have no savings at all. Additionally, the National Institute on Retirement Security reports that almost 40 million households have no retirement savings. To ensure you’re as financially fit as you can be, we encourage you to review your savings efforts during America Saves Week starting February 21, to identify where you’re excelling and where you need to focus.
You can improve your financial resiliency and wellness by following these five steps:
- Save Automatically – Make saving an easy habit by putting your efforts on autopilot. Set up an automatic bi-weekly or monthly savings deposit so that your savings build quickly. You won’t notice the automatic deduction; however, you will notice the growing nest egg in your savings account.
- Save for the Unexpected – Many Americans are challenged to cover unexpected expenses. Keep in mind that unexpected expenses aren’t limited to emergencies – they can be exciting opportunities too. Prepare for surprises, both good and bad, by creating a separate “opportunity fund” account in which a specific dollar amount is automatically deposited bi-weekly or monthly.
- Reduce Debt – Reducing the amount of debt you carry is a critical part of building your financial resilience. Loans and credit card debt reduce the amount of discretionary cash you keep each month and chip away at your financial security. Consolidating credit card balances under one loan to lower the interest rate is one key step. Paying extra towards the principal on loans each month helps to reduce debt significantly faster as well.
- Save for Retirement – Are you maximizing your retirement contributions? Check with your accountant to confirm the maximum annual contributions you can make to your IRA and Roth IRA accounts and ensure those contributions are made on time. Once you are over 50, you may also have an opportunity to “catch up,” allowing you to add even more into your retirement savings. It is also a great idea to review your investments with your financial planner to make any adjustments to capitalize on market or fund changes. Your future self will thank you for saving now.
- Save as a Family – Make saving a family priority to instill good financial habits at any age. Encourage your children to think like a saver rather than a spender and have regular money conversations to educate them on the tools that create financial stability. Help them create savings goals and savings accounts to set them up for financial success.
Being financially resilient increases your peace of mind and ensures you have the financial resources you need available to you. Check out all the great financial education resources on our website and make the time to visit your nearest Allegiance Bank for a financial check-in to ensure your savings are on track.