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Money Management Tips – Day Six

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America Saves Week – Day Six – Money Management Tips

  1. With compound interest, saving just 1% more of your pay ($400 on a $40,000 income) annually can provide tens of thousands of dollars more for retirement.  If you’re 25, 35, and 45 and earn $40,000, you’d have $164,523; $66,623; and $24,436, respectively, by saving 1% more, assuming an 8% average annual return. The more time you have to save, the more money you’ll have. Become an American Saver (it’s free and motivational) at http://bit.ly/gliVkL
  2. “Pay yourself first” is advice that we all need to take to be successful financially.  We can all set aside a few dollars each month to use for our financial goals or emergencies.  Those small amounts soon grow into larger amounts.  You’ll be surprised at how quickly a few dollars per week add up.  Save $50 a week at age 35 and you’ll have $217,645 at 65 assuming a 6% average annual return. Now that you are convinced that savings rocks, become an American Saver at http://bit.ly/gliVkL
  3. Unexpected expenses can break a family budget.  However, a car repair, a minor health problem, and a broken appliance are all “emergencies” we can plan for.  Set aside money each month for unexpected expenses in a savings or money market account. When you establish an emergency fund, money will be there when you need it. For more savings tips, visit: http://bit.ly/fLuD29. 
  4. Like a traveler who has no map, if you don’t have financial goals or a plan to achieve them, you won’t get very far.  Financial planning is very much like planning a trip.  You need to know where you want to go, when you want to arrive, how you plan to get there, and how much it will cost. Once you have determined your financial “destination,” savings will get you there. For more information about savings and the America Saves program, visit http://bit.ly/fWpOBu
  5. Have you ever had $50 in your pocket on Monday and by Wednesday it was gone?  Can you even remember what you spent it on?  Frequently, money slips through our fingers without our notice.  If this happens to you, keep a spending log for a month to see where your money is going.  It will help you “find” money to save by uncovering seemingly inexpensive habits which add up to real money over time. As you look for money to save, join America Saves at http://bit.ly/gliVkL
  6. Want to save money? Look at your debt. Do you buy food or clothing on credit and take months to pay the bill?  Do you pay only the minimum payment on your credit cards?  Do you have four or five credit cards and sometimes use one to pay another?  If you answered yes to any of these questions, you are using credit unwisely and it’s costing you money. Try to never purchase anything on credit that will be used up before you have paid for it. Food, clothing, and vacations are examples of items that you could be paying for long after they have been consumed.  Try to pay credit card balances in full each month rather than carrying a balance. As you reduce your debt, think savings. Join America Saves and become an American Saver at http://bit.ly/gliVkL
  7. One relatively painless way to save is to automate your savings plan. To do this, simply have your bank or brokerage company take money directly out of your checking account or paycheck and place it into a savings or investment account. For more savings ideas, check out the advice of the America Saves program’s e-wealth coaches: http://bit.ly/hSJnXY. 
  8. Do you have goals or dreams?  A dream is vague like “I want to send my child to a good college,” or “I want to be comfortable in retirement.”  A goal is specific and has dates for beginning and ending.  For example, “By the time my child is 18, I will have $20,000 in college savings.” How do you set a goal?  Write it down answering the questions who, what, when, where, and why.  Since this is YOUR goal, begin your goal statement with “I/We”.  Then, state exactly what you will do to achieve it (e.g., save $4,000 annually in a 529 plan).  Keep re-writing your goals until they are specific.  Then tell other people about them so that there are people to hold you accountable. For more savings ideas, check out America Saves e-wealth coach tips: http://bit.ly/hSJnXY. 
  9. Want to save money? Set some financial goals. Goals provide motivation and a purpose for saving. The more specific a financial goal, the easier it is to determine how much savings is required.  You simply work backwards to break a large goal into smaller pieces,  For example, that $15,000 car in 5 years will require $3,000 in annual savings or about $58 per weekly paycheck ($3,000 divided by 52). Join America Saves and become an American Saver at http://bit.ly/gliVkL.

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

  • deborah.killam@maine.edu

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