Successful Saving: Fail to Plan, Plan to Fail

This week is the 9th Annual America Saves Week and the organizations behind the campaign put out the results of their corresponding America Saves Week survey. The data shows that, more than anything else, the number one key to success in saving is having a plan.

“Making a savings plan focuses one’s attention on how one spends and saves their income,” noted Dallas Salisbury, president and CEO of the Employee Benefit Research Institute, and founding director of the American Savings Education Council. “Those with a savings plan tend to be more careful spending money, less willing to borrow unwisely, and more likely to save conscientiously,” he added.

The results of the survey speak for themselves.  Those with a “savings plan with specific goals” save much more successfully than those without a plan.

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Looking at the numbers, having a savings plan makes you about twice as likely to meet your savings goals for emergencies and retirement. So step one (and the most important step) in successful savings is creating a plan with specific goals.

BankRate offers six strategies to incorporate long-term savings into your budget.

  1. Know what you want
  2. Get into the right mindset
  3. Understand the power of compound interest
  4. Track it online
  5. Reward yourself
  6. Invest your raise

To actually create a savings plan, you will need to first determine your savings goals.

Emergency savings: How much do you need to cover unexpected large expenses or to keep you afloat for at least 3 months if you have a sudden loss of income?

Retirement: How much will you need saved for retirement and by when?

Once you know your specific savings goals, you can create or modify your budget to allocate the appropriate amount of money each month towards those goals. For more help on creating a budget, check out my post on 10 Secrets to Starting a Realistic Budget and my Budget Worksheet.

Don’t wait. The right time to start a savings plan is today. Saving isn’t easy, but it’s the most important building block of financial security. Anyone can do it, it doesn’t require a minimum income level and its value is doubled in the peace of mind you’ll receive.

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