Bucketing Basics - Save More Money with Bucket Accounts

Bucketing Basics: Save More Money with Bucket Accounts Millennials have money on the mind. They're stressed out about it and worried they don't have enough of it; yet fewer than half of them have a working budget to track where it goes. Fortunately, having a savings plan can help. In 2013, a Gallup poll found that Americans ages 18 to 29 are moderately to very worried about the following financial concerns: Not having enough money for retirement 52% Not being able to pay for medical costs in the event of a serious illness or accident 52% Not being able to maintain the standard of living they enjoy 46% Not having enough to pay normal monthly bills 40% Not being able to pay medical costs for normal healthcare 39% Not being able to make the minimum payments on credit cards 16% Set Your Savings Goals It's time to de-stress your spending and savings strategy, and doing so starts with setting goals. The top money-related New Year's resolutions made by Americans for 2014 were: 34% 28% 23% Ed resolved to save a set resolved to pay off resolved to reduce amount each month credit card debt monthly spending According to Yale University's Human Resources Department, effective goal setting begins with the SMART approach: Specific- Write down your goal in terms that are easy to understand, outline an actionable process and specify your desired result. For example: I want to save enough money to attend Ben's wedding in June. Measurable - Know how you will measure your goal. For example: For the plane ticket, hotel and gift I'll need to save $500. Achievable - Give yourself a reality check to ensure your goal is realistic. For example: It's six months until Ben's wedding. Can I save $84 a month from now until then? Relevant - Choose a goal that matters to you. If you don't care, you won't stick with it. For example: Ben is one of my oldest friends. Celebrating with him will be an experience I'll always remember. Time Frame – Establish a long-term time frame to accomplish your goal and short-term time frames to accomplish each step along the way. For example: To meet my goal of saving $500 in six months, I'll need to save $84 every month. I'll do this by setting aside $42 each biweekly pay period. Make Your Money Work for You Once you know your goals, it's time to save. An easy way to start is by setting up savings accounts that allow you to create different buckets for each goal. Here's how it works: Start with a basic budget. Subtract your monthly spending from your monthly earnings and circle the result. Then make a list of any extras you want to afford this year. They can be purchases, like a new laptop, or experiences, like a beach weekend with friends. 2 Open your bucket accounts. Start with three: one for checking/spending, one for short-term savings and one for long-term savings. Open additional buckets for the items from your list that you want to save for. 3 Start saving. Set up automatic transfers from your checking account or direct deposit from your paychecks to funnel money into your buckets every month. Track your progress online or with mobile alerts to see when your buckets reach their goals. How can we help you shine? SUNTRUST © 2014 SunTrust Banks, Inc. SunTrust is a federally registered service mark of SunTrust Banks, Inc. How can we help you shine? is a service mark of SunTrust Banks, Inc. Sources: "Millennials Struggle with Financial Literacy," April 24, 2012, USA Today "Stress in America: Are Teens Adopting Adults' Stress Habits?," Feb. 11, 2014, American Psychological Association "Middle-Aged Americans Most Worried About Finances," May 6, 2013, Gallup "Millennials Gain the Most Financial Ground in 2013," Dec. 16, 2013, MainStreet.com "Effective Goal Setting," 2012, Yale University Office of Human Resources, Yale.edu "The Secret to Making Financial Resolutions You'll Actually Keep," Dec. 30, 2013, Forbes