Did You Know That Americans Are Saving Less Than Ever Before?
In fact, more than half, 51%, of Americans have less than three months’ worth of emergency savings1. With an eye-opening statistic like that it's clear that consumers need better savings strategies to help them get on the right financial track. If you are wondering how to achieve financial security and build your savings, you've come to the right place. These four strategies are a surefire way to help you get on the right path.
Have the end in mind: ask yourself what your "why" is (image explained below).
1. Have The End In Mind
What are your financial goals? Why are you saving money? Where do you hope to see yourself financially in ten years? Asking yourself these important questions is the first step to getting on the right track. If you don't know your "why" behind what you are doing, then you will forget the importance of why you are saving or making certain financial choices. Try writing down your top financial goals, big or small, so that you can remember the objectives that you are aiming for.
Did you know? 1 out of 3 Americans don't have a budget in place (image explained below).
2. Budget Carefully
Did you know that 1 out of 3 Americans don't have a budget2 in place? Creating a budget is essential to being financially stable and successful. Take a close look at where you spend your money. Then, ask yourself where you can cut back in order to save more. If you limit, or even eliminate, any unnecessary spending, you'll be amazed at what it can do to your expenses. Now, you may be wondering how you are going to get handle on your nonessential spending. The answer is simple: create a budget. Whether you work with a financial advisor, or you devise a budget on your own, it's vital that you have guidelines to stick to.
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Aim to save 20% of your after-tax income (image explained below).
3. Decide How Much You're Going To Save
Even if you save five dollars a week, creating the habit of saving will help you immensely in the long run. How much you save will depend on your age and where you are in your career. With that being said, a good rule of thumb is to aim to put 20% of your after-tax income3 towards your savings monthly. If you can't save that much that's perfectly fine, but having that be your goal will help you.
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4. Plan For Emergencies
Often times people's emergency savings gets overlooked. In fact, 8 percent of U.S. adults have no emergency savings4 at all. As shocking as that statistic is, people often assume that they will not need an emergency savings so they don't prioritize it. However, this isn't true. If you have to pay for an emergency using your general savings it will put you financially behind. Instead, focus on putting money aside monthly for unexpected expenses only so that if you should have to pay for an emergency, you won't be set back financially.
A strong financial future takes time and dedication, but the rewards are well worth it. If you make planning for your future a priority you will reap the benefits of feeling financially secure in the long run. These four strategies are a great place to start building your savings and setting yourself up for a successful future.
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