5 Resolutions to Get You Saving in the New Year
By Katie Bryan, America Saves Communications Manager
(Source: America Saves)
Happy New Year! Now is a great time to give your finances a checkup and discover if you need to make saving your New Year’s resolution. You may discover that you have debt you need to pay down or that you are ready to take the next step in savings. Helping yourself and your family save successfully for the future should be near the top of your resolution list – and it’s one resolution you can’t afford to break! Remember, you don’t have to make a lot of money to save successfully. Start Small. Think Big.
1. Get Out of Debt
The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. How to do it: Find places to cut your spending so that you can pay down your debts faster.
2. Save for Emergencies
Having an emergency savings fund may be the most important difference between those who manage to stay afloat and those who are sinking financially. In a recent survey, only 49% of families said they had extra funds (not including lines of credit) available to pay for an unexpected expense of $1,000. Don’t find yourself unprepared in 2013. How to do it: Save a Portion of Your Tax Refund.
3. Save for Retirement
Many employees turn down free money from their employer by not signing up for a work-related retirement program such as a 401(k) plan. If they did participate, with a dollar-for-dollar match they would likely receive an annual yield of greater than 100% on their investment. How to do it: Participate in a work-related retirement program or open up a Roth IRA. Already saving? Increase the amount you save toward retirement by 1% in 2013.
4. Make Savings Automatic
It can be hard to put aside money for savings. But there is an easy way to save money without ever missing it – Make your savings automatic in 2013.
5. Buy a Home and Pay Off the Mortgage Before You Retire
The largest asset of most middle-income families is their home equity. Once these families have made their last mortgage payment, they have far lower housing expenses. How to do it: Almost anyone can afford to own a home with proper preparation. Develop a savings plan to build up money for a down payment at purchase, for moving expenses, and for post-purchase emergency expenditures such as needed home repairs.
Savings Strategy: Save a Portion of Your Tax Refund
Tax Time is a great time to kickstart or grow your savings for the future! Use the 30 – 40 – 30 plan. Designate 30% of your refund to pay off debt and catch up on outstanding bills. Earmark 40% for current use. Use 30% to jump start an emergency fund or long term savings. You can use form 8888 to buy a U.S. Savings Bonds. Bonds are a safe and easy way to save for the future.
Are you ready to set your goal?
America Saves is an initiative of the non-profit Consumer Federation of America that encourages individuals and families to save money and build personal wealth. Join as a saver today to receive free resources, tips, and advice to help you save successfully!