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Monthly Challenge: Start a Savings Plan

Monthly Challenge: Start a Savings Plan O NetCredit As part of our Monthly Challenge Series, this month, we challenge you to start a savings plan. SAVE! SAVE! 5% Today, the average American puts less than 5% of his or her disposable income toward savings, leaving little to nothing for emergencies or retirement. And SAVE! unfortunately, that small percentage doesn't look like it's about to start increasing, according to the U.S. Bureau of Economic Analysis. To help you put a little more into your piggy bank and less into stressing about the future, we've outlined 4 tips to help you start a savings plan! 1. Identify Goals Goals are important to help you focus and follow through when saving. As nice as goals are to have, however, they're hard to keep. Why do you think 92% of people who make New Year's resolutions fail to keep them?? There are a number of reasons, but the largest is because they are to0 vague. Be specific! Without clear goals, it's easy to get distracted and splurge on unnecessary items. Being as specific as possible will also allow you to concentrate on how much exactly you need to save and how to budget each month. Ask yourself: How much, for what and by when? WRONG: "I want to save more" RIGHT: "I want to save $5,000 to buy a used car by next year" 2. $1 Dollar at a Time $1 $1 $1 $1 $1 Every savings plan has to start somewhere. $1 $1 $1 $1 $1 Start by saving $1 dollar everyday. With time, it will grow into a substantial savings! $1 $1 $1 $1 $1 $1 $1 $1 $1 If you put your $1 dollar into a savings account with an average 1% interest rate, you'll have saved... $1 $23,646.79 $17,932.35 50 years $12,759.69 40 years $8,076.94 $3,837.72 30 years $41,783 20 years 10 years $31,178 If interest rates rise- and there is speculation that they will sometime this year – then your money could grow faster! With a 2% return, you would have $31,178 after 50 years and a 3% rate would give you $41,783!3 2% return 3% return 3. Automate Consciously saving is hard. Let automated payments do the saving for you! In a study with pre-retirees age 50 – 62, 58% wished they had more automatic savings in place and heavily recommended that younger generations do so as early as possible. 58% Set it up so that each month, a chunk of your paycheck is automatically deposited into a separate savings account – not just into your checking. Automate ASAP! That way, your money will be going to the right place without your even thinking about it! 4. Want or Need? Every time you spend money, ask yourself: is this a want or a need? NEED: WANT: - electronics - dining out - gym membership - food - water - utilities - clothes - transportation RESALE *Find cheaper alternatives for the things you can't live without! Groceries → Buy in bulk to get more for your $! Gym Membership →Work out at home or walk for exercise. Clothes → Resale and thrift shop clothing Electronics → Opt for refurbished/used phones, computers or tablets. 50% 30% 20% Formula for savings success according to authors of The Ultimate Lifetime Money Plan: Spend 50 percent of your paycheck on "must-haves," 30 percent on "wants" and use the remaining 20 percent to pay off debt and save money!5 must-haves wants save Blog Copy References 'Lake, R. (March 18, 2015). 23 dizzying average American savings statistics. Retrieved December 9, 2015 from https://www.creditdonkey.com/average-american-savings-statistics.html Infographic References 'Gross, D. (n.d). American personal saving rate not nearly high enough. Retrieved December 18, 2015 from http://www.nerdwallet.com/blog/banking/american-personal-saving-rate/ 'Wicker, A. (May 20, 2014). Checklist:I want to set financial goals for myself. Retrieved December 21, 2015 from http://www.learnvest.com/knowledge-center/setting-financial-goals/ 'Huddleston, C. (September 4, 2015). How much would you have if you saved $1 a day for your entire life? Retrieved December 20, 2015 from http://www.gobankingrates.com/savings-account/much-would-saved-1-day-entire-life/ “Hopkins, J. (September 16, 2015). A pre-retiree message to millennials – automate your savings. Retrieved December 21, 2015 from http://www.forbes.com/sites/jamiehopkins/2015/09/16/a-pre-re- tiree-message-to-millennials-automate-your-savings/ SSantiago, S. (n.d). Savings strategies for different goals. Retrieved December 20, 2015 from http://www.bank- rate.com/finance/savings/savings-strategies-for-different-goals-1aspx O NetCredit OOOK K K

Monthly Challenge: Start a Savings Plan

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Saving money is always challenging for one reason or another. Whether it’s from limited funds or a lack of self-discipline, setting aside money for savings is hard and, sadly, a staggering amount of...

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