The fact of the matter is that we need to take care of our own financial futures and show our girls that they can, too. America Saves Week is February 27th – March 3rd. What better time than now to start saving or taking a look at what you’re already doing and making sure you’re getting the most out of your saving plan?
To kick off the week, we’re sharing some essential tips below—but we have more planned! For each day of America Saves Week, we will be posting a personal interview with inspirational women in the life of our founder, Dina Shoman, or with one of their parents who most influenced their relationship with money.
Be sure to follow us on Facebook, Instagram, and Twitter for more ideas and inspiration. You can also sign up for our newsletter and receive tips right to your inbox each day during America Saves Week! But for now, enjoy and make use of those tips:
1. If you’re earning, you should be saving.
So many people—especially younger women—put off saving, mostly because they lack the confidence to get going. As soon as you are making money, start setting it aside. Even small amounts add up fast! A big part of finding the margin to save is setting a simple and realistic budget. There are lots of great basic budgeting worksheets available online—we like this one from Mint.com because they classify IRA (Individual Retirement Account) and Savings contributions as a monthly fixed expense, just like groceries and bills.
2. Pay yourself first.
Whether it’s automatically deducting a set percentage or dollar amount into your 401K or other retirement account, let savings happen automatically each paycheck. Typically, your employer can help you do this. If not, speak to a certified financial planner or set up a savings account at a bank or credit union.
There are also apps that can do this for you, such as ETrade, Acorns, Robinhood, and more that can help even novice investors get the hang of setting money aside in an investment account. Just make sure to do your homework, and ask for advice if there’s anything you don’t understand. The principle behind this is that If the money never hits your wallet, you won’t be tempted to spend it on something else.
3. Make sure your money is working for you.
The conventional wisdom is that women aren’t as good at investing because we are more risk averse than men, but new studies show that women being less risky in their investments is a good thing, as we tend to diversify where we put our money and achieve better returns. Lots of people have general emergency savings, which is extremely helpful for things that come up unexpectedly. However, if you stash at least a portion of your savings in an account that will earn the most, such as a money market account, where it can earn interest, your money can work for you while you leave it alone. It’s a great feeling to know that as you add money in each week or month, your money is working for you.
4. Consider goal-based saving.
Rather than put all your eggs in one basket, consider setting up separate savings for separate things. Why? Because each thing you need will require a different strategy to get you to your goal. For instance, you may decide on a 529 account for your children’s education, a Roth IRA for retirement, and a general savings account for your rainy day fund. You might also think about using an app, such as Quapital, or cash envelope/jar system for very short-term saving goals like a wardrobe refresh or room remodel. If you are going to have multiple accounts, it’s a good idea to speak to a certified financial planner to build the best plan for your situation.
5. Treat yourself!
Saving is a hard habit to build, and if you feel like you’re completely deprived all the time, you’ll be more resistant to keeping up with your goals. Allowing yourself to enjoy the little things (or at least one little thing!) will keep saving from feeling like a punishment. It can be anything from a coffee and a magazine date with yourself to a spa day every couple of months—but allowing for relatively small splurges if you can afford them will keep you invigorated and on-track.