July 23rd, 2014
Whether you’re an accountant, a teacher or a C-suite executive, everyone should understand the importance of saving for the future or for possible unexpected expenditures. Saving is vital, no matter where you live, what your occupation is or how much money you make. We’d like to walk our customers through an easy saving plan with some tips on how to make saving a breeze.
The goals we set in life must be realistic, and setting goals for saving money is no different. Saving money is much like a weight-loss plan – the goal is much more attainable once an objective is set and paired with a step-by-step plan to reach it. A “starvation’ budget that forces you to give up everything all at once is not a realistic long-term solution.
Once your money-saving goal has been set, you should set priorities for your accumulated savings. Record and keep track of your goals and use numbers and hard data whenever possible. For example, set a specific retirement income goal. You’ll never be able to achieve your goal if you don’t know what your goal is.
The next step in saving is to get control of your debt. Understand that most people can’t totally avoid debt, but you should avoid using debt to live beyond your means. If you are borrowing to pay interest on existing debt, you should consider cutting back to get rid of those debts entirely.
Using a budget can help define the amount of money you need to fit your lifestyle and preferences. For example, if you use the internet to work from home, spend money for a strong internet connection there, but try to cut back somewhere else.
Along with setting realistic goals, controlling debt and prioritizing your spending, you should consider strategic investments recommended by your banker or financial advisor. A combination of money market accounts, certificates of deposit, stocks and other investment opportunities will help you save money based on necessary returns and needs for liquidity, while considering risks. Using a variety of investments to facilitate your spending is important, but be mindful that your investment needs change as you age. Investing at age 60 should be more risk-adverse than investing at 25.
And last, but not least, don’t forget to change your goals. Change is inevitable. The world changes, investment options change and your needs change. To meet these changing needs, periodically review your budget, spending habits and investments. Change is unavoidable, so create a balance so that your long-term savings plan doesn't require you to obsess over day-to-day or week-to-week changes.
In a vulnerable economy, many Americans are becoming more conscientious about their saving and spending habits, and realizing that saving gets easier over time. So we encourage everyone not to wait any longer and start saving today. For more money saving tips or to help making a budget, please call one of our personal bankers today.