There is no better time to commit to a savings plan than during the first four months of every year. Between New Year’s resolutions, tax season, the Save Your Refund contest, the 52-Week Money Challenge, America Saves Week, Global Money Week, Financial Literacy Month, and Money Smart Week, there is no shortage of motivational activities.
Like many goals in life, saving money begins in your mind, not your wallet. A firm commitment to save money on a regular basis, combined with a realistic action plan, is all someone needs to get started. What we think about, we bring about!
Cooperative Extension held a Twitter chat and Google Hangout about saving money (#eXASchat) during America Saves Week 2015. Participants were asked to describe the one single best thing people can do to save money. Responses included automatic transfers from a checking to savings account, avoiding expensive impulse buying, participating in a 401(k) plan and receiving an employer match, saving $1 a day - plus loose change - in a jar, and ramping up already positive behaviors (e.g., saving 5% of pay instead of 4%). Plugging spending leaks was also mentioned, as well as saving $5 a day on junk food snacks, soda, coffee, lottery tickets, etc. translates to $1,825 a year, plus interest saved.
Another question was where to put one’s savings. One tweeter noted that it depends upon a person’s financial goals and their time frame. Short-term goal options include credit unions and online banks for the best interest rates, savings accounts with the highest annual percentage yield (APY), a certificate of deposit (CD) “ladder” with different CD maturity dates and interest rates, saving loose change, and the popular 52-Week Money Challenge.
Resources for saving money that were mentioned by #eXASchat participants included the America Saves program, Cooperative Extension, MyMoney.gov, and the New York Times’ 1% More Savings Calculator. Savings role models include parents, teachers, financially responsible siblings and friends, reformed over-spenders who turned their financial lives around, and celebrities who espouse good financial habits and charitable gifting.
Other valuable money-saving tips shared during #eXASchat included: boosting your income by being visible and valuable at work, selling things you no longer need online and/or at garage sales, using your knowledge and skills to obtain side jobs, packing a bag lunch instead of eating out, reducing home energy use, shopping at thrift and consignment shops, and negotiating price discounts by asking “Is this the best price available?”
Clearly, financial literacy is power! Resolve to learn one new thing every day about personal finance. In addition, “pay yourself first;” save part of your income, preferably automatically, before you can spend it.