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Achieving financial security and independence is the new American Dream. Saving money for the future is an essential tool for achieving those visions. Money set aside can help you navigate emergency expenses, build financial stability, and help benchmark long-term goals like retirement.
However, during these unprecedented economic times, savings is proving to be a challenge, and nearly a third of Americans have no savings at all. As living expenses rise, prioritizing a budget for savings may feel more like a pipe dream than a necessary financial planning strategy.
It’s important to acknowledge financial challenges while exploring ways to overcome them. Creating a budget, reducing expenses, and seeking better financial tools can help you increase your savings, reduce financial stress, and build a better future.
Save Now, Save More
When it comes to saving money for the future, time is your greatest ally. The earlier you start putting money aside, the more time you have to build up your savings and let the power of compound interest work its magic. Like planting a seed – the sooner you sow it, the longer it has to grow. Likewise, the sooner you start saving money, the stronger your financial health will be.
Another advantage to saving early is the ability to form healthy financial habits. Like any lifestyle change, there will be growing pains. Some weeks you’ll achieve your financial goals, while you may overspend the next. Making these foundational behavior changes early will give you the necessary time to adjust to these new changes.
Achieving financial security is perhaps the most significant advantage of saving money early. Life is unpredictable, and unexpected expenses often arise. Given that 57% of Americans can’t cover a $1,000 emergency expense, having savings protects you and your financial future from taking on debt when the unexpected arrives.
Financial Hurdles
Saving money for the future can be challenging for various reasons. One of the first hurdles you may face is discovering a need for more financial education. Currently, only about one out of three Americans have a good understanding of interest rates, mortgage rates, and financial risk. Fortunately, many states recognize this trend and are now implementing mandatory financial education programs.
Many individuals simply haven’t had an opportunity to learn about personal finances, budgets, or investing, making it difficult to manage money properly. There are many free resources available online to help people become more financially aware and learn about financial planning tactics, such as:
- Identifying Income
- Fixed Expenses
- Variable Expenses
- Debt Identification
- Savings Planning
- Entertainment Budgeting
Learning how to identify these budgeting categories can help you prioritize short-term needs over long-term savings goals. It’s not all work and no play, though. Budgeting for entertainment is helpful to create financial health and independence.
Setting a savings goal and tracking progress online is easy and can be very motivating. Planning for a budget and starting can be harder if you don’t have access to a traditional bank account. However, modern FinTech solutions, such as the Juice mobile app, offer features that make it easier – including the ability to receive your pay without a paper check and features to review and monitor all your transactions.
Overcoming Obstacles in Financial Planning
After identifying these financial hurdles, it’s time to start overcoming them. Popular websites such as NerdWallet or Investopedia offer educational articles, videos, or even online classes to help you strategize saving money for the future. Other financial education resources include:
- Public Libraries: Many public libraries offer books, DVDs, or other personal finance resources for free. Workshops and seminars may also be available
- Government Agencies: Agencies like the Federal Trade Commission or the Consumer Financial Protection Bureau provide free educational material and tools.
- Workplace Resources: Some employers offer financial education resources as part of their employee benefits packages.
Take advantage of these tools to create helpful, flexible budgets. Identifying which expenses remain fixed and which can be manipulated will help you achieve that. For example, the cost of rent is likely to be the same every month. Still, you might be able to create wiggle room in your monthly budget by reducing grocery expenses.
When it comes to savings, there are a lot of recommendations out there. Some advice to save for 3-6 months’ worth of income. Others say to stack away for retirement. That’s difficult to accomplish if you’re just starting out.
As a starting place, consider applying the 50/30/20 rule – in which 50% of expenses are allocated to necessities, 30% go to wants, and 20% of income goes to savings.
Ready, Set, Save
Getting started with saving can be intimidating, but there are some simple steps to help. It’s essential to be specific and realistic. Instead of making a goal to “save more money,” create a clear target, such as saving your first $500.
Creating a budget and tracking expenses is another essential task. Tracking expenses allows you to identify areas where you may overspend and then cut back. One consumer survey found that the average American pays $273 for monthly subscription services! Those $5, $10, or $20 monthly subscriptions add up quickly.
Start small. Starting small can be an effective strategy for building savings. For example, instead of paying $10 to skip ads, try the free subscription and put that $10 back towards savings. Over time, these small contributions add up and help build momentum.
Of course, staying motivated is a key factor in success. Track that progress towards savings goals. You can do that by regularly checking account balances, reviewing budgets, and celebrating milestones along the way. Acknowledging the progress will help build confidence and long-term financial health.
Final Thoughts on Saving Money for the Future
When it comes to savings, there’s often only one way to eat the elephant: one bite at a time. Long-term financial stability is possible, and it starts now. The sooner you start saving, the more money you’ll add. However, it’s essential to identify those hurdles along the way, make a plan to overcome them, and then implement those consistent, personal strategies.
Make specific and realistic financial goals by creating a budget, tracking expenses, starting small, and monitoring progress toward savings. Don’t forget to celebrate along the way. Take charge of your financial future and, if you’re not already a cardholder, ask your employer if the benefits offered by Juice Financial could offer you and your company.
Juice can help you and your colleagues overcome common obstacles to saving and building a more financially secure future with low-cost and high-impact solutions. Don’t wait to start taking steps toward financial wellness. Share the benefits of Juice Financial with your employer today.
