Who knows what tomorrow will bring? You may not be able to predict the future, but you can prepare for it by saving for the predictable and unpredictable – savings for unforeseen emergencies, or saving for a brighter retirement. Being prepared for unexpected expenses can provide more options when making financial decisions and help reduce your stress level.
However, setting aside money for the future isn’t as easy as it seems. If it were, Americans would be saving more. A 2014 Bankrate study found that more than one-third of Americans haven’t saved anything at all for retirement, and a 2015 Bankrate Money Pulse poll found that more than 60% of respondents didn’t have any money earmarked to cover emergencies or unexpected expenses. Americans’ personal savings rate as a percentage of disposable income is just 5.4%, according to the Federal Reserve Bank of St. Louis. Forty years ago, it was 17%.
So, how do you become one of the Americans who has a safety net of savings in place? Many banks have made saving for emergencies or the future simple, so you can focus on enjoying today and worry a lot less about tomorrow.
Automate your savings. You can direct your bank to make automatic withdrawals and transfers to savings options. If you never see the money that goes into your savings account, or other savings vehicles like certificates of deposit or money market funds, you don’t miss it because you never saw it.
Automatically transfer money into an IRA at your local bank. An individual retirement account, or IRA, is a great way to save for the future, and your money grows tax-free.
Set aside income for savings. It’s never too early to save. You don’t need a lot to get started, and the longer your money works for you, the more money you earn. If your paycheck is automatically deposited into a checking account, set up an automated transfer of some of that money to a savings account or money market account.
Sign up for the company 401(k) plan for long-term savings and long term growth. When you enroll in the company 401(k), savings are deducted before you ever see them, and the interest and dividends earned in your 401(k) grow tax free – another bonus.
Save your tax refund. If you get a lump-sum tax refund, plan to set it aside in a savings account for short-term contingencies. Plan to do it every year and you’ll have a good start on a long-term goal like college, or a stress-free retirement.
Make your money work harder for you. If you keep a lot of money in your checking account, it’s not earning interest. It’s not creating more money for you. Automatically transfer money from checking to savings when you reach a certain dollar threshold. It’s automatic and painless.
Talk to your bank professional to automate the distribution of deposits to suit your needs today and tomorrow. What kind of savings accounts do you need? You can set aside savings for unforeseen medical expenses, or deposit money into a 529 account to set aside money for your kids’ college tuition.
The best way to save money is to pretend you never had it in the first place.
Saving for the future may not sound like much fun now, but when the future is here, you’ll be glad you set aside cash every week. To learn more about automated savings and other bank services, visit with a Nevada State Bank money professional and start taking control of your future.
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.
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