Well most of the time I can keep a secret, however this is one of those times I just can’t hold water. Did y’all know it was a secret to saving more? Well, really it isn’t a secret. It’s actually being motivated to save and finding way’s to save.
According to a new, 15-part checklist released this week, the most important steps toward creating a solid nest egg include making a plan with specific goals, avoiding high-interest debt and saving at least 5 percent of your income. Before you bash me 5% is not that much. The campaign also recommends making savings deposits automatic through bank accounts and contributing regularly to retirement accounts. You can read more about automatic saving here.
In a survey of more than 1,000 people conducted in September, it was found that young people between ages 18 and 35 were particularly interested in saving. This fact is attributed partly to the lingering effects of the Great Recession as well as concerns over the stability of Social Security. That younger group also had the highest rating for effort made to save. Go head young people whoop whoop!
It can only be speculated that the late, Great Recession especially influenced young people, and that they’re skeptical about receiving Social Security benefits. Heck, I’m not even young and I’m skeptical about receiving Social Security benefits. It’s also noted that the median income of young adults has fallen, which further underscores their financial insecurity and need to save. Sorry young people.
The survey also found that higher-income individuals reported the highest levels of interest in savings, as well as the greatest amount of effort made to save. The group attributes that finding to the fact that it’s likely easier for higher-income individuals to find ways to tuck money away. Unsurprisingly, higher-income individuals also reported being able to save more effectively than lower-income individuals. The highest levels of interest, effort and effectiveness of saving were found among respondents earning over $100,000 a year.
It can be said that those with the greatest ability to save also make the greatest effort to save. Hold up, I don’t make $100 grand a year but I manage to find way’s to save. If you are looking for way’s to save you can find them here. The findings illustrate the pessimism among low-income Americans and the pervasive belief that it is too difficult to save. That’s why I believe it’s just as important to help motivate people to save and to provide opportunities to do so, as it is to inform them how to save effectively. Don’t forget to grab my FREE report, 54 Way’s To Save Money
I want to convince those in the lower-income brackets, including those earning under $50,000 or even $25,000 a year, to find ways to save more. That way, they can avoid credit card debt or high-interest rate payday loans and build up greater financial security. According to the report, moderate, and not just low-income families, did not believe they could save $1,000. One of my principal goals is to persuade people that they have the ability to save.
Believing that they can save is one of the first steps toward helping low-income families do so. Even starting with just accumulating loose change, which can add up to $100 a year or more, can be a good start. In my years of personal finance coaching, I have heard stories where that’s how people started to save. It wasn’t the amount of dollars that was important, it was seeing that they could save.
While several hundred dollars might not sound like significant savings, it can actually make a big difference for those in the low- and middle-income brackets, In a 2008 study from the Consumer Federation of America found that having at least $500 in savings was correlated with a slew of other positive financial factors, including less concern over paying monthly bills, the ability to keep up with the mortgage or rent and general concern over personal finances. The survey data suggest that this figure [$500], or something close to it, may represent a threshold that distinguishes both attitudes and behaviors.
For people on the financial edge, saving $100, or $200, or $500 can make all the difference in the world. The most important financial step for low-income individuals is to increase their incomes.