Are you saving enough? For many Americans, the answer is “no.” An article published by CNBC addressed this issue in 2019, citing some startling statistics from the Federal Reserve: 40% of Americans have not reserved $400 for an emergency, and 25 percent of Americans have nothing saved for retirement.
Even more concerning is the fact that these statistics were compiled before the economic impact of COVID-19. In a time when everyone is adjusting, and readjusting, to new ways of life, the thought of saving money for the future may seem overwhelming, if not impossible. However, it doesn’t have to be. Here are 6 strategies to help you start saving today:
If your livelihood hasn’t been altered due to the pandemic, setting up an automatic transfer of funds from your paycheck to a savings account is one of the best financial moves you can make. It’s also one of the easiest financial strategies to implement. At Fidelity Bank, this program is called Smarts Cents Savings. Customers choose the amount that automatically transfers from their checking accounts to their savings each pay period. It doesn’t have to be a large amount. Figure out what’s affordable and ask a Banker to set it up. It’s well worth the few minutes of time to establish this system.
Your household budget should reflect changes in your life. If your income has changed, revise your budget accordingly. Start with an assessment of fixed expenses (mortgage, rent, groceries, insurance), and see where reasonable modifications can be made. For example, some lenders are offering special programs during COVID-19 to assist homeowners experiencing financial hardship due to the pandemic. Credit card fees may be re-negotiated, and insurance policies can be updated.
If you want to contribute more to your savings account, look for ways to cut back on discretionary spending. For example, if you’re paying monthly fees for multiple streaming services, consider scaling back to just one, and deposit what you would have spent on the other subscriptions into your savings account. Review your internet and cell phone packages and look for areas where you can downgrade packages and still access the services you need. Distinguish between needs and wants, and opportunities for savings will present themselves.
One strategy to save more includes changing a good habit that many people have developed – paying their credit card balances in full every month. Under normal circumstances, this is a great practice. However, if your savings are getting a bit lean, consider making an adjustment to your payment practices temporarily. It may be wiser to make the minimum payment on your credit cards for a few months and deposit the rest into savings to build up that emergency fund. Additionally, speaking to a Banker about debt consolidation could be a huge help. Through vehicles like a Home Equity Loan for example, you may be able to pay off higher interest debt through a low interest loan, or think about consolidating all the debit into one lower, monthly payment.
Many remote workers are discovering the joys of saving money on gas, parking fees, business lunches, professional wardrobes, dry cleaning — the list goes on, and it really adds up. Tally up those savings and redirect those funds into your savings account.
Sometimes cutting the budget just isn’t sufficient. If that’s the case, consider increasing your income with a side job. With increased need for essential workers, and the rising popularity of remote work, there are lots of opportunities to explore part-time or freelance positions. Automatically deposit the income from your second job into savings, and your fund will grow in no time.
Fidelity Bank has built a strong history as trusted advisors to customers served and is proud to be an active member of the communities it serves. With 20 branches located throughout Northeastern Pennsylvania and the Lehigh Valley, Fidelity Bank offers full-service Trust & Investment Departments, a mortgage center, and an array of personal and business banking products and services. The Bank provides 24-hour, 7 day a week service to customers through a variety of digital banking tools, branch offices, online at www.bankatfidelity.com, and through the Customer Care Center at 1-800-388-4380.