SIMPLE STEPS TO SAVINGS: PART 1

Did you know that on average Americans only save a nickel of every dollar? If you were to save a quarter a day you would have $91.25 for yearend. A quarter a day may not seem like much at all, so why is it that we only can save a nickel for every dollar?  The first step to saving is to set a reachable goal for yourself. But it seems that even when we set a goal, even as small as saving a quarter a day, we find ourselves coming up with reasons of why we couldn’t save that quarter for the day, the week, or the month. A financial planner in Washington recently came up with a couple ways of saving some money – all simple things that if people continue to do them, they could be saving much more than that nickel for every dollar. If you have tried setting a goal for yourself and seem to fall short, try these simple steps to savings.

Allowances are not just for kids – For fun, give yourself an allowance and see how well you do. The best way to do this practice is to put only that amount of your allowance in your wallet for the day or for the week, and once it is gone, it is gone. Do not allow yourself to use those plastic cards that always save us for the time being, but then hurt us when the bill comes in. Of course, there are some things that come up that you have to get but this is why setting a reasonable allowance should be enough for you each week. Any extra funds should be set aside for the rainy day activity or for those unexpected items. Or if you are someone that has saved enough but wants to keep saving you can roll forward any money left over for the next week. However, if you find that you are rolling forward money each week, you should adjust your allowance down! 

Katie Rubalcaba, Associate Accountant
Davis & Hodgdon Associates, CPA’s
May 2012