Four Secrets to Savings

The status quo in the U.S. seems to be that people will live right up to their income level and delay saving for “some other time.” When it comes to a lack of savings, it is often a matter of high spending rather than low income. There are exceptions; situations when we need to spend more due to employment loss or unexpected healthcare bills, etc. However, for the majority, our lack of saving is due to excessive spending. Here are a few simple strategies that can help increase savings without significantly changing your quality of life.

  • 1. Let it simmer
    Next time you consider a purchase, try giving yourself some time to think about it. Do you need it … or just want it? I recommend the bigger the purchase the more “simmering” time. Give yourself time; if you still feel you need the purchase, you can move forward knowing it wasn’t an impulse.
  • 2. Pay yourself first
    When you get a paycheck, you likely pay bills first. Change this immediately! Start by moving money from your checking account to your savings first! If you start with even a small amount, it adds up quickly. Start this habit and stick to it!
  • 3. Be a Smart Shopper
    It is easy to grab snacks or coffee when we are out and about. If you stop at a party store every day for a quick coffee on your way to work, that $1.75 a cup adds up to about $600 a year! In an interest bearing account at 5% for 30 years, that $600 would give you over $30,000 in your pocket.*
  • 4. Set Goals
    Had you begun saving $200/month ten years ago, you would have $24,000. Unfortunately, we can’t go back in time; but we can look forward. There are many free tools online that you can use to compute how much you are willing to save each month and what that amount will be worth in the future, given a chosen rate of return.

Implementing these four simple steps will help you on your path to increasing your savings. You may also want to consult with a financial professional.
Rate of return is for illustrative purposes only and is not indicative of any particular investment. Results will vary.