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Money Management Tips – Day Five

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America Saves Week – Day Five – Money Management Tips

  1. Ever hear about the Latte Factor™? Every time you don’t have a latte at a coffee shop and a donut at coffee break or don’t spend money in a soda machine, save the money you didn’t spend.  Sometimes we spend small amounts daily without even thinking.  Small things really do add up. Now that you’re motivated to save, become an American Saver at http://bit.ly/gliVkL
  2. Here are two good savings tips. Continue Paying A Loan – If you’re about to pay off a loan, continue making the same monthly payment – to yourself!  Bank A Windfall – Whenever you receive unexpected money – an inheritance, bingo winnings, tax refunds, retroactive pay, etc. – put at least part of it into savings. Become an American Saver at http://bit.ly/gliVkL
  3. An easy way to see how long it will take for your savings to double is called the “Rule of 72.”  The formula doing a calculation is: 72 divided by the interest rate equals the number of years it will take for your money to double.  For example, at an average annual return of 7%, a sum of money will double in about 10 years.  Learn more about saving and investing: http://bit.ly/fWpOBu
  4. Serve smaller food portions.  Not only does this save money, but it is also better for your health.  Currently about 31% of Americans are obese (30 or more pounds over a healthy weight) and about 65% of Americans are either obese or overweight (10 or more pounds over a healthy weight).  Save the money you save on food costs. Become an American Saver at http://bit.ly/gliVkL
  5. Want some great financial advice from some of the nation’s leading financial experts…for free? Seriously, this service really exists and nobody is trying to sell you anything. The America Saves program posts monthly messages from e-wealth coaches about topics related to savings and personal finance. To view what they have to say, see: http://bit.ly/hSJnXY. 
  6. Want to get serious about saving? Follow this four-step process: 1. calculate how much money you need for retirement or other goals (type “financial calculator” into an Internet search engine), 2. plan how to accumulate the money you need, 3. act to implement your plan and save money, and 4. reassess your financial needs and the progress of your plan every year. For more information about saving, visit the America Saves Web site at http://bit.ly/fHbGQy
  7. Make savings an “expense” in your spending plan (budget), just like rent, utility bills, or a car payment.  Automate savings through a credit union or retirement savings plan or through monthly deductions from a bank account to purchase U.S. savings bonds or mutual fund shares. For more information about saving, visit the America Saves Web site at http://bit.ly/fHbGQy
  8. A tax-deferred employer plan (e.g., 401(k), 403(b), etc.) is a good place to save. Contributions are deductible on federal income tax returns (e.g., a worker with a $32,000 salary who makes a $2,000 contribution only pays federal tax on $30,000).  There is also tax-deferred growth of principal and investment earnings and savings is deducted from a worker’s paycheck, before it can be spent. Another advantage is employer matching at many workplaces. This is free money that shouldn’t be passed up. For more saving information, visit the America Saves Web site at http://bit.ly/fHbGQy
  9. If you’re saving in a tax-deferred employer retirement plan, try to save more (e.g., increase from 2% to 4% of pay).  The best time to “kick it up a notch” is when you receive a raise or a household expense (e.g., car loan, child care) ends.  For more savings information, visit http://bit.ly/fWpOBu.

For more information or to comment on this blog, contact:

  • deborah.killam@maine.edu

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