If you were to ask the people around you to tell you honestly whether they are putting money away in savings, some would proudly nod their heads and reply that, yes, they are trying to put something aside for the future. Others would probably sheepishly look at you and reply that they would like to but can’t put aside as much as they would like. Still others would give you a blank stare, as if they didn’t understand the question and wonder why anyone would ask such a thing.
In this credit-fueled age, saving has become an antiquated concept for some people. But it wasn’t always so; saving money was something many of us were taught to do from childhood, and many children grew up in families that required them to save for things they wanted, instead of buying on credit.
Having money in savings is just as much a path to financial independence as it was 50 years ago; savings is a bulwark against many things that can ruin your financial future: job loss, unexpected expenses, medical problems and many others. On a larger scale, individual savings have traditionally been an indicator of a nation’s financial health.
According to the report, one in five workers say they aren’t saving anything, and a substantial percentage of those aren’t saving enough. All this is despite positive economic indicators.
“With a steady, significant share of the working population saving nothing or relatively little, it’s virtually guaranteed that they’ll be unable to afford a modest emergency expense or finance retirement. That amounts to a financial fail,” stated Mark Hamrick, senior economic analyst at Bankrate.com.
Apparently, many employed people who would like to be saving aren’t doing it because they’re living beyond their means. Nearly 40 percent of those responding to the survey listed other expenses as the roadblock to putting money away. Others (16 percent) said their jobs just don’t pay enough or they just “haven’t gotten around to it.” Thirteen percent blamed debt, while about 6 percent said they don’t need to save money, either because they think they have enough or don’t see it as important.
There are many great ways to start putting money away. Most financial websites have some great ideas for developing ways to become a better manager of your money, and making it work for you (instead of the other way around). Here are three:
- Create a spending plan and follow it. A good budget that includes setting aside money for the future will not only help you be a better master of your money, it will help you develop your long-term financial security.
- Take advantage of employee matching. Many employers offer to match money you put into a retirement fund. This will effectively double your contribution, and many people are leaving money on the table if they don’t take advantage of this common benefit.
- Encourage your kids to save. There are many great ways to teach children good savings habits. One common approach is the Moonjar or similar approaches, in which kids take their allowance, birthday money or other income and divide into three containers for saving, spending and giving. As the amount of money in the jars grows, they will develop solid habits that can last their entire lives.
And if you’re interested in teaching financial literacy to your kids, there are many great resources out there.
Saving can be hard to learn, but just like nearly everything else that requires us to change our habits, it takes time, commitment and dedication. Arming yourself with the right tools is the first step towards taking control of your money.