How to Save at Every Age
By February 16, 2023 Money management
When you’re a child, finding a dollar in the street and adding it to your shiny new bank account may be a major life event. When you’re middle-aged, funneling money into your retirement account feels like a big win. And when you’re retired, having enough money in savings to live comfortably is a major accomplishment.
While every stage of life has its own measure of financial success, the bottom line: Saving money at any age is a reason to celebrate.
Yet Americans are renowned for not prioritizing saving during their lifetimes. In fact, according to data available from the Federal Reserve’s Board Survey of Consumer Finances, the median savings balance — not including retirement funds — of Americans under 35 is just $3,240; that jumps to $6,400 for those ages 55-64.
So how can we make better decisions and prioritize saving? As part of America Saves Week — February 27 – March 3, coordinated by the nonprofit Consumer Federation of America (CFA) — Plumas Bank and the CFA are shining a spotlight on how individuals can better save money, reduce debt, and build wealth.
With that goal in mind, we’re here to explore Saving for Your Past, Present and Future by researching common saving recommendations and tips for each stage of your personal and professional life. Because taking small saving steps paves the way toward your fulfilling financial future.
There’s a good chance you’re already one of our savings account holders, meaning you’re well on your way. Ready to grow that balance even more? Read on for tips to save at every age.
Saving When You’re Young
While youth is characterized as a time of frivolity, we adults know: It’s the best time to establish the habit of saving money.
Not only is saving a way to set financial goals and realize them, but it’s also a tool that will prepare our kids for adulthood, as they’ll be able to handle what life throws at them down the road.
And saving when you’re young doesn’t have to represent some big financial obstacle. In fact, it’s about the small steps, funneling a dollar or two at a time — depending on income — into a savings account.
According to the Consumer Federation of America: “Children can learn to set a saving goal and figure out how long it will take to save enough money for their goal. Create a fun system to track progress, provide regular encouragement, and use incentives such as matching funds. Talk about how it feels to see your money grow. And don’t forget to lead by example – show children how you are saving.”
Many of our clients at Plumas Bank are entrepreneurs with families, meaning this is the time to pull the curtain back and show your kids how you prioritize saving — personally and for your business. If kids see that saving money is a routine and critical component of your financial strategies, they’ll be well equipped to form the same kind of habit as they age.
Saving When You’re a Professional/Business Owner
A significant chunk of our lives is spent in the workforce, meaning this is the best time to determine a savings strategy that works for you.
The options are endless. In our last blog post we talked about how paying down your debt is a means of saving, and we even offered two wintry strategies — the snowball and the avalanche — as different techniques for attacking debt.
While saving when you’re entrenched in the tedium of working may seem like a big hairy audacious goal, it doesn’t have to be. In fact, according to the Consumer Financial Protection Bureau: “A good rule to live by is to save 10 percent of what you earn, and have at least three months’ worth of living expenses saved up in case of an emergency.”
So how do you accomplish this? One idea is to make saving a passive process. In this video, Carolyn Pemberton, America Saves senior program manager, talks about the idea of automating your savings as a means of growing your account and preparing for the future.
Jeb Heiman, Plumas Bank Business Advisor in Quincy, commented, “As a father of three young boys, I’m always thinking about ways to save. An easy way to start saving is by setting up direct deposit and putting a portion into a savings account. Saving automatically has helped me feel more confident in my family’s financial future.”
Heiman added, “Whether you’re saving $5 or $10 a month, or more, it’s the fact that you’re doing it automatically that is important. It’s easy and it sets you up for success! By request, any one of our team members here at Plumas Bank can set a client up for direct deposit and have a portion of the funds transferred automatically into a savings account. If you’re looking for an easy way to save, I highly recommend it.”
Establishing saving priorities now will help you weather unexpected challenges, empower you to accomplish goals like buying a house or starting a business, and will set you up for the future.
In fact, the Consumer Federation of America advises: “Thinking of our future self – what we will want, what we will be doing, what we will believe – is one way we can develop a saving mindset. Asking questions about our future selves helps us create a vision for our future. For example, consider:
- Where does your future self live?
- What does a typical day look like for your future?
- What hobbies does your future self enjoy?
- How much money does your future self earn?
And now, let’s discuss that future we’ve been planning (and saving) for…
Saving When You’re Retired
You’ve done it — you saved enough money in your youth and your working years to finally retire. Now what?
It’s time to help that money last as long as it possibly can.
The America Saves campaign has you covered, with 54 ways to save money that range from the simple (literally save your coins, because even they add up) to more innovative strategies (place inspirational savings messages in proximity to your credit cards so that you ask yourself “have I met my savings goal today” before you spend money).
Of course, specific to retirement age, a significant financial concern is healthcare. You’ll also find practical tips about saving money when it comes to this part of our lives, like the following:
- Don't skimp on preventive healthcare.
- Ask your physician if generic prescription drugs are an option.
- Comparison shop for prescription drugs at local pharmacies, supermarkets, wholesale clubs, and mail-order pharmacies.
- Purchase store brand over-the-counter medications, which can cost 20-40 percent less than nationally advertised brands, but are the exact same formula.
The Takeaway: Save Now, Wherever You Are in Life
Whether it’s pennies or big chunks, anything you save today will help you feel financially stronger tomorrow.
So reach out to your personal or business banker, make a plan and reap the rewards of that action when you realize your saving goals.
Ready for more ideas?
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