Did you know that only half of Americans report having good savings habits? If you are on the wrong side of that percentage but want to change, America Saves Week, February 23 – 28, 2015, is the perfect time to start. You can review your finances, establish your savings goals for the year, and set up a system to put money away automatically. All of these steps follow the America Saves Week theme of “Set a Goal. Make a Plan. Save Automatically.” and can lead you down the path of greater financial freedom.
Whether you need to start with a clean slate or you’re already saving, there is no time like the present to take a look at your financial picture and revise or set a savings goal. If you’re ready to join the thousands of others in New Jersey and all across the country who are pledging to pay down debt, save money, and take financial action but don’t know where to start, don’t worry. We’re happy to help you with this seven-step guide to adopting money-saving habits that stick.
Set a Goal
How much money would you like to save? And for what? When you pinpoint a clear savings goal—be it a new car, a down payment on a home, or a backyard swimming pool—it becomes a whole lot easier to conjure up the self-restraint required to achieve it. It needn’t be a big ticket item, either. Visualize a goal like a college savings account for your children or a fund for dining out at the cornucopia of restaurants in North Jersey so you stay focused, motivated, and disciplined. NVE has a variety of savings products to help reach your goals, no matter what they are.
Map Out a Timeline
Once you’ve determined your goal and how much money you’ll need, determine how long it will take. If you want to save $4,000 for a trip to France, for example, figure out how much money you’re willing and reasonably able to part with each paycheck and then calculate how many pay periods it will take you to get there.
The act of consciously putting away a set amount of money on a schedule will help build the muscle memory you need to get in peak financial shape. Since this is the key to adopting a new behavior that will serve you long after you’ve reached this particular savings goal, it’s important to stay on track. Break down your timeline into weekly, monthly, and quarterly savings targets and be sure to verify that you’re meeting them. You may find breaking up large goals into a series of smaller ones makes them a whole lot easier to accomplish!
Remember: saving even $1 a day makes a difference. The key is identifying the largest amount of money you can commit to stowing away on a regular basis without thwarting your ability to make good on all your other financial obligations. Don’t shortchange yourself, but beware of setting a goal that’s overzealous. Meeting your goal should be a challenge, not an impossibility.
When you reach major savings milestones, treat yourself! Your reward doesn’t necessarily require you to spend any money, and it certainly shouldn’t bump you off track. It could be anything from a guilt-free movie marathon on the couch to a meal at your favorite restaurant, or an item you’ve been admiring through a store window.
Likewise, it’s important to implement consequences if you fall short on one of your savings benchmarks. If you are 20% shy of a quarterly benchmark, hold yourself accountable. Spend Saturday night at home instead of going out, calculate how much you saved, and put that amount straight into your savings account. If need be, break out your timetable and devise a new plan to help get back on track.
Extinguish Bad Habits
Keep track of every outgoing dollar over a two-week period to identify any wasteful or unhealthy spending habits. Then, put a stop to them! Online budget planners offer easy tools to analyze every dollar, but old-fashioned pen and paper works just fine, too.
The spending and saving habits of your past don’t define your future — your current ones do. Hitting the reset button won’t cure all your financial woes, but when it comes to adopting good saving habits it’s truly half the battle.
Take the America Saves Pledge today to set your savings goal and make a plan to save. Sign up to receive text message tips and reminders that can help you meet your goal. America Saves Week is coordinated by America Saves and the American Savings Education Council.
For information on NVE products and services, go to www.nvebank.com or visit one of our NVE Bank neighborhood branches, conveniently located throughout Bergen County, and speak with one of our Branch Associates. You can also call us at 1-866-NVE BANK (683-2265).