(originally published January 2010)
Many Hoosiers committed to changing their money management behavior for the better this year, including making a point to save each month. While it can be easy to slip back into old habits, the upcoming America Saves Week, Feb. 21 through 28, is a great reminder to stay strong with your financial resolutions.
America Saves Week is a national initiative encouraging people to take action to improve their financial situation and to prepare for the future financially. The theme for the week is seemingly simple: build wealth, not debt. However, many people continue to struggle saving a portion of their income each month while spending within their means.
A recent survey conducted by the American Savings Education Council (ASEC) revealed that 77 percent of Americans are concerned about the impact of the current recession on their personal finances but they are not necessarily changing their saving habits as a result. In fact, a third of the survey’s respondents reported that they don’t have a savings plan or a “rainy day” fund to cover expenses in the event of economic downturn, job loss, sickness or other emergency.
Here are some savvy savings tips from my office’s Indiana Investment Watch Program to help you stay on track with your financial resolutions:
Save for a goal. If you are not frugal by nature or are struggling to earn money, it may be difficult for you to save just for the sake of it. Instead, to help keep you motivated try saving for a specific goal such as buying a home or car, planning for retirement or paying for college tuition. Create a timeline, including the amount you need to save each month to reach your goal, and track your progress. Post a picture of your goal next to the timeline to create a visual reminder of why you are saving.
Save automatically using direct deposit. Many employers offer an option to directly deposit your paycheck into your bank account rather than giving you a paper check to manually deposit. In most cases, you can designate a certain percentage or dollar amount of each paycheck to go into a savings account, rather than a checking account. If you save money automatically, you may be less tempted to spend it.
Think of saving as striking a balance. With everyday expenses adding up and the general cost of living, some people may find it difficult to save even just a little each month. Counteract that mindset by thinking of even the littlest ways to save. There may be small habits you can change to save a little here and there. For example, pack your lunch instead of going out to eat every day. Consider switching from premium to basic cable. Avoid unnecessary fees by only using the ATM of your bank or credit union. Spending less in these small ways can add up to big savings.
Here are some additional ways you can spend less:
For more money management tips and tools, visit http://www.indianainvestmentwatch.com/.