How do my savings stack up?
Your savings are an important part of your financial snapshot. But if you wish you had more money in the bank, you’re not alone. An estimated 38 million households in the US live paycheck-to-paycheck, and nearly half of American households have no retirement savings at all. Use the calculator below to learn where your savings fall, and keep reading to find some tips on how to save more effectively.
Experts recommend having at least three months’ worth of expenses set aside for emergency savings. How many months’ worth of savings do you have?
You can also visit Bankrate.com’s retirement calculator to estimate how much you can expect to need for a comfortable retirement.
Emergency savings goals
Building up an emergency fund equal to three months of expenses might seem like an impossible goal, but the good news is that you can start small. Even small amounts of savings can help create a cushion for times of financial hardship.
Take it one step at a time.
You won’t save three months (or one month) of expenses overnight, so set manageable goals. You can build up your emergency fund in stages. These stages can look different for different families, but they should aim to increase the amount you have saved over time. Maybe Step 1 is saving $100, Step 2 is saving enough to cover your car insurance deductible, and Step 3 is saving one month’s worth of expenses. Set goals that make sense to you.
It’s much easier to save when you don’t have to think about it. The old adage “out of sight, out of mind” is especially true when it comes to saving money. Consider setting up a direct deposit into a savings account so that part of your paycheck automatically goes toward your goals—before you even see it in your bank account. This method saves you time and makes it more likely that cash will find its way into your savings account.
Don’t be discouraged if you have to break into your savings.
More often than not, emergencies come up before we reach our “ideal” savings goals. It’s easy to get discouraged when an unexpected expense chips away at the savings we’ve worked so hard to build. But remember: if you used your emergency savings, it means you did not have to go into debt to cover that expense. And also, if you saved that money once you can do it again.
Building retirement savings isn’t easy, and planning for what feels like the distant future can be hard when there are so many expenses to cover now. But the earlier you start saving for retirement, the more time your money has to work for you. The sooner you start, the more you can watch your money grow.
Don't forget retirement!
Make a plan for retirement.
Don’t wait to start planning. It’s important to think about what your finances will look like and what your expenses will be. You can access https://www.ssa.gov/retire/ to find out what your social security benefits will be when you retire. If you have retirement accounts but don’t know how much is in them, request a statement to find out. Your coach would be happy to help.
Find out what your employer offers.
If you don’t already know, find out if your employer offers a 401k, and if they do, if they offer any kind of savings match. An employer match is basically free money, so it’s definitely something to take advantage of if at all possible.
Find the right product for you.
Talk to your coach about the right retirement product for you. If it’s your first time saving for retirement or if you’re worried about investing your money, ask your coach about opening a myRA, a great retirement product for beginners.