According to Project C.A.S.H., one-half of American households have accumulated less than $1,000 in net financial assets. This alarming statistic is suggestive of the financial vulnerability that 50% of Americans find themselves caught up in. With financial difficulties rated at the top of the list as a major cause of depression and catalyst for relationship deterioration, there is never a better time to start a savings plan than right now. Your financial future, as well as the future of your relationships depend on it. Here are some suggestions for starting and maintaining a nest egg:
Research savings options: There are a lot of ways to save your money from basic savings accounts, to IRA’s, money market accounts, state sanctioned college funds, mutual funds, etc… Educate yourself on these options and decide as a couple which option(s) are best for you based on your current financial and personal situation. There are a wealth of books and websites from credible sources that can assist you in your research efforts. You may also want to consider meeting with a financial advisor who can explain your savings options and offer advice based on your financial goals. A quick word of wisdom imparted by my father…nobody takes care of your money the way you do. So, always empower yourself by knowing the facts before you make any financial decisions.
Create a budget: The next step to successful saving is to create a realistic budget that fits your life. Don’t forget to include categories such as entertainment, gas and miscellaneous items. Make an effort to be accurate in your expenditures rather than underestimating the true amount in each budgeted category. This is also a good time to “get real” about the total amount of debts that you have currently acquired. After the shock wears off, you are ready to create a realistic budget given your earnings and expenditures. Once you have a clear picture of how much you earn in relation to how much you spend, you are better able to evaluate how much you have to contribute to a savings plan.
Implement the savings plan: After you decide on the type of savings plan you will adopt, open the account if necessary and watch your savings grow. If you are married, or have a merged financial situation, be sure that you and your spouse/other party are committed to your goals and communicate openly regarding finances. Handle your finances as a partnership and discuss all major financial situations such as large purchases. Lastly, make necessary changes or upgrades to your savings plan as your life situation changes.
The good news is that time is on your side when you decide to save money. The sooner you start your savings plan, the more time you have to grow your nest egg. Having a solid saving plan can benefit your life in a variety of ways. Money in the bank creates peace of mind and a feeling of stability and security in your life. Savings can prevent you from going into debt when life’s little emergencies happen. I once heard a wise person say, “Money won’t buy you happiness. But, it sure takes away that nervous feeling at the end of the month!” And, that’s the truth!