Top Saving Tips
Giving your family the best chance at a brighter future means setting money aside so that you don’t have to worry about financial burdens later in life. If an emergency crops up unexpectedly, you don’t get cleaned our completely.
Overall, the United States isn’t in the best situation financially. Given that it is now 2020 and you’d think more of us would be able to weather the storms of life when it comes to money, but we aren’t saving enough.
Millennials are in a bad way. 60 percent of Millennials don’t have enough money saved to handle a $1,000 emergency expense. If they were suddenly faced with this kind of financial pressure, they would be forced to raise the money by borrowing it either from friends or family or have to put the expense on a credit card, or even worse they would have to sell an asset.
And it isn’t just the younger generation that is affected by the lack of saving. Over half of adult Americans can’t cover the same $1,000 outlay at short notice either. According to a report by Bankrate, almost a quarter of Americans have no emergency savings whatsoever. It isn’t just regular saving that is not going so well. According to the Employee Benefit Research Institute, fewer workers than before report they have saved any money for their retirement either!
Here are three tips to get you on the road to financial security:
Work Out Your Budget
An essential part of getting prepared for your day-to-day life is to know what you need to survive, as well as setting aside money for eventualities like medical bills or emergencies. A detailed budget helps you understand how much you have to work with and how much you require every month and every year overall. Saving for your retirement needs to be included in the budget.
According to the Government Accountability Office, about 29 percent of American households from the age of 55 and up don’t have any retirement savings in any form. Start working out your expenses and how much you will need to have a stable and care-free retirement now, rather than panic in the future.
Knowledge is Power
A lack of knowledge puts one in a very precarious position when it comes to finances. The thing that exacerbates people’s financial risk is a lack of financial literacy. In order to budget effectively and make sound financial decisions, one needs to possess some bare minimum financial knowledge.
Recent statistics indicate that two-thirds of Americans struggle with basic financial concepts and lack the fundamental financial literacy skills needed to get by.
Get professional advice, and if you don’t feel comfortable, get a second or even third opinion, so that you are sure of the risks and responsibilities involved when it comes to investment or savings. Read up on retirement savings, and find out all about 401k plans and if they apply to you. You don’t want to find out later that the money you thought you were saving has restrictions or tax implications that you weren’t aware of.
Every Little Bit Counts
No matter what, try and save every month or every week. Each time you get a paycheck or money comes in, take as big a slice as you can and put it away. Put as much aside as you can without putting yourself under pressure. It all adds up.
Saving sooner rather than later is the best way to ensure you have a nest egg or at the very least something for a rainy day or an emergency. It isn’t a pleasant thought that so many Americans are in danger of financial trouble were they to be faced with a $1,000 surprise expense. Get ahead of the curve. Save.
IMPORTANT DISCLOSURES
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.