I make a decent income but I don’t think I am saving enough. What can I do?
A If you are saving anything, you are way ahead of most Americans. Good for you! There are several theories about why Americans have lost the habit of saving money for college, retirement, and/or emergencies. Whatever the reason, you can help reverse this trend by getting your individual savings back on track.
- What is your monthly income?
- What are your monthly expenses?
- Where does your discretionary income go?
- Do you have assets you can convert to savings?
- Can you identify a savings goal?
- Do you have somewhere to put saved money?
Let’s take these one by one:
- No matter your income, you can save. From $1000/month, save $5.00. Then $10.00, etc
- Look at what can be trimmed. Are you throwing out uneaten food or leftovers every week? That means you can trim grocery or dining costs.
- Instead of paying for magazine subscription, share with a friend or neighbor or use your public library. Split an entree with your dinner date instead of taking half home and paying for twice what you need. Skip bottled water. America’s tap water is among the world’s cleanest and safest. Every time you fork over money for an impulse purchase, ask yourself if you could save that money instead. Think of it like a game.
- If you are holding on to something because it might be valuable someday, research the value and get an expert opinion if you truly have an appreciating asset. If the feedback is the item is probably at maximum value or there is a chance it will lose value, see if you can sell it. Convert items to cash and put that cash away.
- Have a rainy day fund. A few hundred dollars stashed can give you peace of mind. Perhaps you need new tires for safer driving, or want a new car.
- Banks still offer savings accounts for small savers, as do credit unions. There’s always the ol’ coffee can! Just make sure to leave it alone once deposited.
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“Why Don’t Americans Save More Money?” by Derek Thompson 4/19/15 in The Atlantic