COLUMBUS -- The spotlight this week is on personal savings. Numbers from the Consumer Federation of America indicate in December of 2017, the personal savings rate dropped to just 2.4 percent, its lowest level since 2005.
The American Savings Education Council is working to improve that percentage of where your income goes, once again hosting America Saves Week. They call the week “an annual opportunity for organizations to promote good savings behavior and a chance for individuals to assess their own saving status.” The organization offers these saving strategies:
- Save with a plan. The campaign says savers with a plan are twice as likely to save successfully for things like retirement and education.
- Consistently saving – even in small amounts – over an extended period of time allows the power of compound interest to work for you.
- Save automatically. Each paycheck have a certain amount deposited into your savings account instead of your checking account. It helps resist the temptation to save only what’s left over at the end of the month.
- Save for rainy days. Grow an emergency fund that would help you cover any surprises that life throws your way – medical expenses, home or car repairs, or job loss – without going into credit card debt or tapping your retirement assets. Most experts recommend keeping your emergency fund liquid – in a savings or money market account – so it can be converted to cash quickly when needed.
- Save to retire. Ensure you have enough money to live comfortably when you need to stop working or reduce the number of hours you work. Take advantage of an employer-sponsored retirement program, such as a 401(k) or open an IRA. Now is a great time to increase the amount you’re saving by 1 percent.
- Save the extra. As important as it is to save consistently over a long period of time, for some people, it’s just easier to save a windfall. When you receive a bonus at work, a tax refund or a cash gift, keep a small amount to treat yourself. Save the rest in your savings, retirement, or 529 account.
- Save as a family. This week is a great time to teach your kids about financial responsibility. While you’re planning, saving, and investing, talk about the choices you make with your children. Elizabeth Kiss, Ph.D., Associate Professor and Extension Specialist at Kansas State University says,
“Talking about family saving goals helps children understand that putting money aside for the future – whether to be prepared for unexpected expenses, for short-term goals such as summer vacation, or for longer-term goals such as paying for college – is important to you. They will also likely be interested in knowing how they can help. They may even want to set their own savings goals and be motivated to work toward achieving them!”
America Saves is a national campaign involving more than 1,000 non-profit, government, and corporate groups that encourages individuals and families to save money and build personal wealth. Overall management for the campaign is provided by the non-profit Consumer Federation of America. CFA is comprised of over 270 consumer education, advocacy, and cooperative organizations dedicated to advancing the consumer interest.
The America Saves campaign is motivating people to take financial action with its annual #ImSavingForSweepstakes – a chance to win up to $750 toward your savings goals. Learn more here.