This month during America Saves Week, February 21st through 25th, 2022, is a great time to do a check-in to help ensure you’re saving and preparing for a secure financial future. This year’s theme, “Building Financial Resilience,” reminds us that many have experienced financial setbacks from the economic fallout of the pandemic over the past two years.
Financial resilience is about more than just having enough money. Financial resilience includes preparing for unexpected events that can leave you financially unprepared. Throughout the week, each day focuses on the following themes:
Monday, February 21, 2022- Save Automatically
Tuesday, February 22, 2022- Save for the Unexpected
Wednesday, February 23, 2022- Save to Retire
Thursday, February 24, 2022- Save by Reducing Debt
Friday, February 25, 2022- Save as a Family
Here, we will list ways to build financial resilience using each day’s theme.
Save automatically- Through your payroll deduction, set a certain amount of your earnings to deposit into a savings account automatically. Or, set up automatic deposits from your checking account to your savings account each month. You’re less likely to forget to save when you set up automated savings.
Save for the unexpected– A ‘Rainey-day fund,’ also known as an emergency fund, is another savings account specifically for emergencies. Over time, this account grows by making automatic emergency fund deposits until it reaches the amount equal to three to six months of living expenses. Having emergency savings to financially cushion you from events such as job loss, major repairs, or illness helps to ensure that your retirement savings or other assets don’t prematurely liquidate- you can use your emergency savings instead!
Save to retire- Saving for retirement is essential to your future and can be automated so that you receive your employer matching dollars into your 401(k). Also, saving after-tax dollars through automatic contributions into a Roth IRA helps prepare you for a financially secure retirement. Work with a financial professional to determine a retirement savings strategy appropriate to your situation.
Save by reducing debt- When you carry debt each month, such as credit card, auto or recreational vehicle loans, etc., and pay interest each month, less money is going to you. Loans and credit cards are designed with minimum payment options to cost you more money over time while also making the lender more! Each dollar saved in interest is one more dollar you can keep in retirement savings or other investments.
Save as a family– Teaching your children about saving and why saving is essential helps prepare them to be financially savvy adults. Also, teaching them how to manage their money has positive, long-lasting effects, helping to deter the negative consequences of overspending when it comes to their own money.
Work with a financial professional- A financial professional can help you develop a savings strategy for your situation and a financial plan to help you reach your financial goals. Contact them today to get started.
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