Saving is a step to building a stronger future – whether you’re starting a college fund for a child, saving for retirement or building an emergency fund. The troubling reality, according to bankrate.com, is: about half of U.S. adults are saving 5% or less of their incomes; nearly 1 in 5 isn’t saving anything at all; and just 14% aren’t saving the recommended amount of 15% or more.
Two Steps to Savings Success
Your path to success begins with a plan. Did you know consumers are twice as likely to save successfully with a savings plan. Here are two steps to savings success:
1) Create a budget. First, track your spending by saving receipts or through an online financial management system and categorize your spending. Next, determine your income—include take home pay, investment income and other sources. Third, set realistic financial goals and develop your budget to achieve them. Finally, stick to it. Keep track of your spending and update your budget as expenses and incomes change.
2) Save, save, save. Ensure money is saved every time you’re paid through automatic savings. If your paycheck is directly deposited, put part of it into a savings account. If not, link your checking and saving accounts together and establish automated transfers between accounts.
Being SMART Increases Your Odds of Success
To increase your odds of success, create SMART – Specific, Measurable, Attainable, Realistic, Trackable – goals. Here’s a breakdown with examples to get you started:
• Specific. State exactly what you want to achieve, how you're going to do it and when you want to achieve it. Instead of “improving your finances,” pay off your medical bill in eight months so you know when you achieved it.
• Measurable. A goal should be measurable so you know when you achieved it. Instead of “paying off most of my credit card debt,” pay off one credit card bill in full.
• Attainable. Make sure the goal is within reasonable reach. Instead of “saving money,” save $1,000 in a year by putting aside $3 each day.
• Realistic. Is the goal realistic for you? Don’t ignore your limitations. Instead of “managing your money to become a millionaire,” manage your money to be debt free and have an emergency fund.
• Trackable. Being able to track your progress encourages you to keep going and reach your goal. Instead of “increasing your saving goal each year,” each year you will save 10 percent more than the previous year.
Busey is dedicated to providing support and resources to help you achieve your savings goals—whether it’s establishing an emergency fund, paying for your child’s education or saving for retirement. Stop by one of our many convenient locations or call 1.800.67Busey.