Be honest. If you had to come up with $2,000 to pay for an unexpected expense next month, could you get your hands on the money? Over a third of respondents to a national study by the FINRA Foundation -- 34% to be exact -- said they probably or certainly could not do so. That's where America Saves Week and Military Saves Week -- which runs from Feb. 27 through March 4 -- can help.
America Saves and Military Saves, both managed by the nonprofit Consumer Federation of America, are annual opportunities for civilian and military organizations and their personnel to promote good savings behavior and a chance for individuals to assess their own saving status. Specifically, it's the perfect opportunity for those who know we should save more (let's face it, that's most of us) to commit to a plan to do so.
The good news is that committing to a savings plan yields powerful results. According to the 2016 annual America Saves Week survey assessing national household savings, those who have a savings plan with specific goals make savings progress on a number of fronts:
- They are more apt to know their net worth than those who do not have a savings plan: 61% who have a plan know their net worth, compared to only 33% who do not have a savings plan.
- They are more likely to say they have "sufficient emergency savings" (79% versus 46%).
- They are more likely to save automatically outside of work by a margin of almost 3 to 1 (60% versus 26%).
- They feel they are making "good or excellent savings progress": 55% of those with a savings plan think they are making strong savings progress compared to only 23% of those without a plan.
Saver success story
Saving can have powerful results. It certainly did for Marchale Burton. She overheard a colleague explain how saving just a little bit -- even pocket change -- is all it takes to become a saver. "I thought about that," Burton said, "and wanted to see if it would work." So, she challenged herself to see how much change she could save.
Burton decided that whenever she made a cash purchase, she would collect the change in her coin purse. When her coin purse got too heavy, she put the change into a large water cooler jug. Since October 2011, she has saved almost $1,100.
For Burton, seeing how much change she could convert to savings was a way to recommit to her belief in saving. Saving lets you "see what you can accomplish when you put your mind to it," Burton explained. Beyond the money she saves, Burton said putting aside money gives her confidence and a sense of security and freedom. "It's empowerment," she said.
Take the pledge
America Saves Week and Military Saves Week can become the nudge we need to help us plan to save -- whether for an unexpected emergency, retirement, a new car or house, or a summer vacation. We can start by taking the America Saves or Military Saves Pledge. It's a commitment to yourself that you'll follow these steps:
- Set a goal. Establishing a goal greatly increases the likelihood that you'll take the action necessary to achieve that goal. Decide what you want to save for, and how much you need to save to meet your goal.
- Make a plan. This can be as simple as making a pledge to put $20 per paycheck into a savings account.
- Save automatically. Work with your financial institution to set up an automatic deposit so part of each paycheck you receive goes directly into a savings account. You probably won't miss the money, and you can't spend money you never received. Pay yourself first; it's an investment in your future.
Saving is the foundation of any personal money management plan, but financial knowledge isn't enough. It's the combination of knowledge and action that sets you on a path to success. Taking the America Saves or Military Saves Pledge is a quick and easy way to set your financial plan in motion.
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