During the month of February, we partner with America Saves Week — a national nonprofit effort encouraging Americans to set a savings goal, make a savings plan, and save automatically. We invite you to join us, by taking the America Saves pledge, designed to help you create a monthly savings plan and stay committed to it all year long. Join millions of others who — like you — are taking time to start or grow their savings. America Saves and People’s United Bank is here to keep you motivated with information, tips, and reminders to help you reach your savings goal.
If you’re like millions of other Americans, coming up with extra cash in an emergency presents a real challenge. Unexpected expenses are a fact of life. Recently the Federal Reserve noted that almost half of Americans do not have $400 cash available in an emergency fund.
This is even more true now with the financial crisis many have faced since the onset of the coronavirus pandemic. The pandemic has put a spotlight on the importance of saving – more people than ever are committing to becoming more financially stable and thinking more like a saver. Saving money, improving your financial life, and building wealth all start when you set a goal and make a plan to reach that goal.
So what is your goal? Set up an emergency cash fund? Get out of debt? Make a down payment on a car or home? Sock away money for college or retirement? Savers who make a plan are twice as likely to save successfully. Become part of an entire community of savers.
One of the easiest and most effective way to save is to SAVE AUTOMATICALLY.
Having a “set it and forget it” approach to saving increases your success rate.
Remember, savings is a HABIT, not a destination. When starting your savings journey, getting into the habit of saving is so important. Start small and THINK BIG. Even if your savings goal is $10 a week until you accumulate your first $500 in your emergency fund, you’ll be better prepared for unexpected emergencies and can simply pay it with your cash savings!
Whether saving for an emergency fund, education expenses, retirement or all things in between, saving automatically puts you in the best possible position to reach your savings goal. It’s a great way to build wealth and financial security, and it’s easy to set up.
The two best ways to save automatically are:
1) Split Deposit:
Have your employer direct a certain amount from your paycheck each pay period and transfer it to a retirement or savings account (or both). Traditionally, you can set this up using your employer’s direct deposit, ask your HR representative for more details.
If you have a People’s United Bank account, download our direct deposit form her
2) Automatic Bank Transfer:
Every payday, your bank or credit union transfers a fixed amount from your checking account to a savings or investment account. Talk to your local bank to set this up.
If you have a People’s United Bank account, learn how to set up transfers through Online Banking.
Save for the Unexpected
For decades financial gurus have told us that we need to have 3 to 6 months of expenses saved to be financially secure. While the more you can have socked away for a rainy day, the better, for most Americans saving that amount is overwhelming and scary.
But, when you focus on building your HABIT of saving and start with a small goal of just $500, that seems much more attainable. Then, once you achieve that milestone you can confidently keep going!
Before you know it, saving has become a lifestyle. You’re saving automatically and building your rainy day fund!
Try our calculator tool to find out how much you should save for emergencies.
Save to Retire
Many of us have thought about retirement, and hopefully many of us may already be saving for it. But have you thought about HOW you want to retire? More specifically, have you thought about what it will take to continue to live the lifestyle you have or the lifestyle you want once you retire?
Many Americans have expressed that the pandemic has helped them realize what matters most to them. Family, stability, creating memories, and travel were sentiments that we heard over and over again, when asked what was most meaningful to them.
Being able to have the type of lifestyle you want during retirement—spending quality time with loved ones, traveling, and not being a financial burden on your family, means that you have to plan for retirement TODAY.
As you sit down to do a financial check-in within yourself around your retirement today, consider not just IF you’re saving for retirement, but if you’re saving ENOUGH for retirement. You can start by seeing just what it will take to become a millionaire, just to put things in perspective.
We encourage you to create an account on www.socialsecurity.gov/myaccount to see what your current estimated monthly benefits will be at the age you retire.
Save by Reducing Debt
WHEN YOU PAY DOWN YOUR DEBT, YOU’RE SAVING!
By actively reducing your debt, you are saving on interest. When you pay on time, you save on late fees and maintain your credit score – which will save money long-term.
With so many Americans being affected financially by the pandemic, actively paying down your debt may not be a priority, and that’s okay. Be sure that you talk to your creditors and take advantage of any repayment options or arrangements that allow you to keep your credit score in tact and avoid additional interest and late payment fees.
Learn more about debt management, and whether paying down debit or investing your savings makes more sense for you.
Save as a Family
Whether you’re a family of two or a family of ten, you’re probably wondering where the money goes each month? You’re not alone: 2 out of 5 families don’t follow a budget, which is key to saving. You can help make better spending and saving decisions when you learn to budget as a family.
And also remember, the best way to teach great money habits to our children, partners and other loved ones is to model great money habits. While most Americans know the importance of making sound financial decisions, many feel that money management wasn’t taught to them at a young age. Be creative and intentional about your financial parenting—look for ways to teach your children about money, spending habits, and saving. After all, savings can be both tangible (like saving in a piggy bank) and intangible (like preserving energy by turning off the lights).