It’s America Saves Week! That means it’s time for you to evaluate your savings goals and make sure you are putting away the right amount for you. Are you saving? The 2012 Annual National Survey Assessing Household Savings found that Only 66% of Americans spend less than their income and save the difference. That means that 34 percent are living outside of their means. Not very many people are spending cash only, and for most people a credit card is a supplement to income. That is the road to destruction and financial demise! (Insert doom and gloom here). But there is no need to fear because America Saves Week is here! Let’s take a look at three ways you can become a better saver.
To Become a Better Saver: Set a Goal
The first thing you can do to become a better saver is to set a goal. Determine what you want from life. Whether it is a short term goal or long term goal, it has to have a deadline. I’ve talked about SMART goals before when creating vision boards and a savings goal should be set up in a similar way. For example, you could have a goal to save $25 dollars a paycheck. If you are paid bi-weekly, you would have $600 dollars at the end of the year. Not bad for such a small amount. Or, you could set a goal to contribute the max to your retirement accounts. If you have a Roth IRA or a 401k at work, contributing is easy. According to the same study, only 42% of Americans say they have a savings plan with specific goals. We need to do better!
To Become a Better Saver: Make a Plan
Now that you have a goal set, you need to make your plan to get there. When I am getting ready to plan my money or with planning out my study goals I like to use pencil and paper. For some reason it helps me to brainstorm better because I can just dump all of my ideas down without editing them as I go. One of my goals is to contribute the max to my company 401k. My plan to get there is to continue to live within my means and increase my contributions with each pay increase that I receive. Once I set my goal, the planning step was natural and pretty easy. But we all know that saving is just not that easy, like any goal, you have to put in the effort.
To Become a Better Saver: Save Automatically
So let’s make saving effortless. The first thing you want is to make sure you have an FDIC insured savings account. You can get this through your local bank or an online bank. Capital One 360 has one of the best online savings accounts. Here are a few reasons why.
- They offer competitive rates
- There is no minimum deposit to open
- There are no monthly maintenance fees
In addition, you can easily deposit checks on the go with their banking app. That is a must for an online bank. To make your savings automatic you should create a monthly or bi-weekly withdrawal from your checking into your savings account. I recommend at least 10%. Did you know that Transferring money from checking to savings is the fastest way to save $500?
How are you planning to save? Do you have emergency savings? What is your savings goal for 2013?
See more on banking in our Checking and Savings FAQs.