The Savings Game

Although the past decade or two has been marked with a frivolous “I’ll get to it later” attitude towards savings, the current economy has been causing people to take a step back and realize that future financial security is a necessity. In fact, there are many, many excellent reasons to save, including the following:

• Retirement—who wants to have to go back to work after realizing they didn’t save enough to retire? No one. Take steps NOW to ensure that you can enjoy your retirement and plan today for things you want to do then, like traveling, visiting grandkids, etc.
  
• Big ticket items—back fifty or sixty years ago, the attitude was “I save for it… Then I buy it.” Until recently, our attitude has been more “I buy it… Then I pay for it.” This is the wrong attitude to have. Buying everything on credit is not the soundest financial practice. Save up money to buy something, and then you won’t have to take out as big of a loan. And the more you pay upfront, the less interest you pay on a loan. Let’s face it—wouldn’t you rather save the money, pay for something in full, and skip having a loan and interest payments?
  
• Rainy day fund—you can never see the future, but you can prepare for it. Your goal should be to have 3-6 months worth of spending money saved up. However, an ideal situation would be to save and pay off your debt. That way, you can pay off what you owe and provide for your future. If something unexpected happens, you’ll have a little tucked away just in case.
  
• Education—whether it’s for you, your partner, or your children or grandchildren, education is an excellent savings goal. You don’t want your child to get to their senior year of high school and realize that because you put off savings, they are going to be saddled with mountains of debt for years to come.
  
• New house—there are many reasons why you might want to move: new job, new town, new state. The more you have saved, the less you have to borrow.
  
• FUN & FREEDOM!!! There may come a time when you want to buy yourself something nice, or take a second honeymoon, or buy a motorcycle. Who knows! Whatever the case, having the money to treat yourself will make you a whole lot happy and make your dream more realizable. And having money in the bank makes you free… Free to choose what you want to do, where you want to go, what you want to leave your children once you’re gone. Saving is worth it. You want to put together a plan for your future—and then you want to make it happen. Saving money can help you do this.
  
  Some savings tips:
  
• Start small
  
• Get a free 401(k) match—sometimes, employers will match what you put in your 401(k) (up to a certain amount of money). Take advantage of this! One day you will want to retire (although that day may be tomorrow, saving up for it will make it more possible!)
  
• Replace old (bad) habits with new ones—as financial advisors, we cannot say this enough. Stop buying expensive coffee every day and instead buy quality grounds and make yourself a cup at home. Have manicure parties with your girlfriends instead of getting manicures done every week. Don’t buy something on credit; buy it when you have the money to pay for it in full.
  
• No automatic deductions—with automatic deductions, you don’t see how much money you are spending because it magically gets taken out of your account each month. Be constantly aware of your spending habits. Don’t spend more than you mean (or need) to.
  
• Friend challenge—challenge a friend to a savings contest. Go out for ice cream to celebrate, or do something that both of you enjoy. This way, everyone wins.
  
  Savings doesn’t have to be hard. But money will not magically appear in your bank account unless YOU put it there. Begin today to have a happy, secure, and free tomorrow.