Do you ever find yourself wondering if there is a magic formula for saving?
Does it seem that everyone around you knows the secret to saving successfully except you? It’s not unusual to feel less than confident about saving, no matter how much money you earn. Confidence doesn’t necessarily come with having a lot of money. Rather it comes from building healthy financial habits and using the resources you know are available to you – this is your financial confidence!
A great place to start building your financial confidence is to set up automatic savings. When you are saving a dedicated amount of money every week, every month, or on some other regular interval, you can begin to feel a sense of control over your saving habits. Whether you are saving just $5 or $10 a month or more, it’s the fact that you’re doing it automatically that is important.
Saving automatically is the formula for successful saving for anyone – including you. Getting started doesn’t have to be a hurdle either. Consider which one of the following two strategies would work best for you and follow the steps we’ve outlined.
- Instructing your employer to split your directly deposited paycheck into two or more accounts at your financial institution with one account being a dedicated savings account.
- Directing your financial institution to automatically transfer money into your savings account.
For option #1, contact your employer’s payroll department to set up split deposit, telling them how much you want to save per paycheck, and follow their instructions.
If you want to use option #2, contact your bank or credit union telling them when and how much money you want automatically transferred into your savings account.
By utilizing either of these automated saving methods you can feel confident about building a healthy habit of saving. Imagine how good it will feel to see money accumulating in your savings account on a consistent basis. Instead of that voice in your head telling you that saving is hard, you’ll be able to say with confidence, “I am saving regularly!”
CRA helps you save for retirement
One way to automatically save for the future is to increase your 457(b) contributions. These contributions are directly deposited into your retirement account by your employer, so it’s easy to budget around. If your circumstances change in the future, you can increase, decrease, or stop contributions as-needed.
Generally, experts recommend contributing 15% – 20% of your annual pay towards retirement. This includes contributions from you and your employer combined.
The amount an individual actually needs to save for retirement is dependent on many factors.
One thing is for sure, if you can afford to contribute more to your retirement, the retired version of your future self will appreciate the sacrifice shown by you, today. To put it into perspective, an additional $50 every 2 weeks for 30 years, at an average 6% annual rate of return, will increase your retirement savings by nearly $106,000. Check out this calculator for yourself, HERE.
Click the appropriate button below to get started!
America Saves has a number of resources that can help you get started saving automatically:
- The Spending and Saving Tool to help you get a clear view of your finances and determine a realistic amount you can save regularly
- ThinkLikeASaver podcast where you can learn about making saving easier, saving in spite of inflation and many other topics designed to support your saving habit.
- The America Saves Pledge, which can help you make a saving plan and receive ongoing support through emails and text messages
So, remember your unique financial situation calls for you to make the choices that will work best for you and your family, which will ultimately increase your financial confidence and help you continue making informed choices throughout your saving journey!
AMERICA SAVES WEEK
America Saves Week, is a time-honored event; a national opportunity for organizations to work together within their communities to transform the lives of millions of Americans by encouraging them to save successfully. The America Saves pledge is the framework that allows savers to set a goal, and make a plan to achieve better financial stability.