America Saves Week runs through Saturday, March 3rd and it’s all about encouraging positive savings habits. Making saving a habit is important, because research shows that people who plan to save are more than twice as likely to succeed in reaching their goals.
We also know that automating your savings—even in small amounts, through something like a digital transfer from your paycheck, or simply putting a $5 bill aside every week—is a great way to ensure you stay consistent with those habits. When you automate your savings, you can focus on other things and watch the results grow over time.
At Clarifi, we want to help you plan for your financial goals and aspirations—and at the same time prepare for the unexpected, so your plans don’t get derailed.
Every day, our certified counselors meet one-on-one with individuals and families who are working on their financial goals. Building savings is an important part of these conversations.
In honor of America Saves Week, we wanted to share some of our counselors’ best advice.
Counselor Kim Rogers breaks it down in three simple rules:
- Pay yourself first: When your paycheck arrives—before you pay bills, before you buy lunch, before you buy anything—take some portion of your paycheck and stash it in the bank (preferably a separate savings account where you won’t be tempted to touch it for a while). Do this every two weeks or whenever you get paid. If it’s automatic, you’re less likely to miss it.
- Pay yourself like you pay a monthly bill: Building on rule #1, make yourself a priority, just like you would treat your rent or the electric bill. If saving feels like something optional, it’s easy to avoid, but when you take the obligation to ‘pay yourself’ seriously, you’re much more likely to stick with it and get closer to your goals.
- Name your savings account (down payment fund, vacation fund, birthday fund): Having a name a specific goal for your savings account can dramatically increase your odds of success. Plus, research shows that the process of anticipating an experience can make it even more enjoyable. We’re certainly all for that!
Counselor Aaron Williams’ advice is all about reframing your thinking—and getting a little creative.
“When people tell me that they can’t save due to fixed income or living “paycheck to paycheck,” I introduce them to what I call the ‘Coffee, Puppy & Baby,’” Aaron explains.
Here’s how it works:
- Coffee: Take $2 or whatever amount you might spend on a coffee, and sock it away somewhere for yourself. Make your coffee at home or work instead. (Don’t have $2? Write an IOU and pay yourself when you get paid). You might have $40 at the end of the month—put that in the bank. Keep it up and you’ve got $480 at the end of the year
- Puppy: We’ve all seen those heartbreaking commercials with the sad music and the puppy in the kennel. The voiceover says: “for just 65 cents a day, you can save this puppy!” Your own savings are worth that at least. Think about putting aside just $1 a day for yourself. At the end of the year you’ve got a substantial amount.
- Baby: Every year in April, our church hands out baby jars for us to take home and collect loose change. We fill it up and bring it back to church on Mother’s Day. A local organization gathers the jars and uses the money to help expectant mothers and mothers of newborns purchase baby essentials. I loved the idea, and decided to apply it to myself as well.
Every day after work, I throw the loose change in a mason jar. Once it fills up, I take the change to my bank and deposit it in my savings account. (If you don’t have a savings account, you can find a Coinstar machine near you).
Those are just a few ways you can make saving money a habit and a priority in your life. Keep an eye on our blog for more money saving tips this week.
To make an appointment with one of Clarifi’s certified financial counselors and talk about your money goals, call us at 215-563-5665 or go to myclarifi.org