It is the perfect time to review your finances, set your savings goals for the year, and set up a system that will allow you to save automatically.
Did you know that only half of Americans report having good savings habits? Even if you are already saving, it’s good to take a look at your greater financial picture and decide whether there’s potential to save more or set a new savings goal.
Not sure what to save for or what to save for next? Here are the most popular saving goals:
• Save for Emergencies – Research has shown that low-income families with at least $500 in an emergency fund are better off financially than moderate-income families with less than this amount. Nearly a quarter of savers who have taken the America Saves pledge have chosen “emergency savings” as their first wealth-building goal.
• Save for Retirement – Retirement savings is a top priority for many savers. Saving for retirement now will ensure that you have enough money to maintain a comfortable standard of living when you stop or reduce the amount of hours you work.
• Save for Education – Saving for education is the second most popular goal savers select when they pledge to save with America Saves. There are many different things to factor in when saving and paying for college.
• Pay Down Debt – Getting out of debt is the #3 goal savers select when they pledge to save. The good news is that there is hope. With planning, discipline, patience, and maybe some outside help, almost anyone can reduce their debts and start to accumulate wealth.
• Save for a Home – For decades, home ownership has been the main path to wealth for most Americans. Today, home equity – the market value of a home minus the balance on any home loans – represents more than four-fifths of the typical family's wealth.
Not sure how to save for your goals? Here are some saving strategies to help:
• Save Automatically – The easiest and most effective way to save is automatically. This is how millions of Americans save at their bank or credit union, and how millions of employees save through 401(k) and other retirement programs at work.
• Save at Tax Time – Do you spend weeks eagerly anticipating your tax refund? When the money finally comes in, is it gone tomorrow? Many people view tax refunds as unplanned bonuses. They see the money as a gift from the government, to use for splurges or treats. But a tax refund provides the opportunity to improve your financial situation.
*These tips are provided by America Saves, the American Savings Education Council, and the Iowa Bankers Association.