News From Our Blog

Starting a New Job? The Secret to Saving Money at Work

image

By Katie Bryan, America Saves Communications Director

I have never been a particularly good saver. I wasn’t the child who stashed away babysitting money or saved money I received as gifts. But a series of important (and lucky) decisions has helped me build my savings since I started my first job.

When I started my first full-time job my employer took the time to sit down with me and explain how their retirement plan worked and how I could easily sign up for it. She also explained that they would match my savings, dollar for dollar, on the first 5 percent that I put in from my paycheck. If I didn’t put any money in the plan, I would be missing out on the free matching funds. It made the decision to open the account easy. Now years later that fund has grown to more than I ever could have imagined when I opened it.

You too can begin to build wealth at work through these simple strategies:

Start Small. Think Big.

If you are starting your first job, or just starting to save, starting small is a great way to begin to save. Whether it’s 5 percent of your paycheck or $25 a week, those small savings will add up over time. If you can save even more that’s great! For example, if you save only $50 a month (earning 2 percent interest compounded monthly) you will have over $36,000 in 40 years.

If you need some additional motivation to save take the America Saves pledge, where you can choose a savings goal, create a plan to reach it, and receive tips and advice.

Automate Your Savings

Once you decide how much to save, set up an automatic savings plan. Your employer can help you set up direct deposit and you can choose to have the amount you want to save put directly into a savings or share account before you get your paycheck. This is the best way to save because once you make the decision to do so, it just happens without having to think about it.

Participate in Workplace Retirement Plans

You can also save automatically through a work-sponsored retirement plan or through a Roth IRA if your work doesn’t have a plan. Check to see if you work offers any matching funds and make sure you save enough to take full advantage.

Gradually Increase Your Contributions

This strategy works well no matter how much you are saving. Each year take a look at how much you are saving and slowly increase that amount. A great time to make these changes is at the end of the year or during tax time. This works especially well if you expect to receive a pay increase, a cost of living increase, or a tax refund.

Implement these simple strategies for saving at work and watch the savings grow.

America Saves, a campaign managed by the nonprofit Consumer Federation of America, seeks to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth. Learn more at americasaves.org

Financial Literacy Survey Finds Knowledge Gaps in Basic Money Skills

image

The National Foundation for Credit Counseling’s 2014 Financial Literacy Survey revealed significant gaps in personal financial knowledge in the areas of budgeting, saving, and understanding credit reports and credit scores - all key areas related to successful money management.

The survey, conducted online in March, polled more than 2,000 U.S. adults over the age of 18. Here are some of the findings:

Budgeting and debt - Sixty-one percent of U.S. adults, the highest percentage in six years, admit to not having a budget.  Financial experts generally agree that a budget is a basic tool of financial management, and without it, a person can more easily lose track of spending.  Nonetheless, consumers appear reluctant to utilize this tool, which could explain why about one in three adults (34%) indicated their household carries credit card debt from month-to-month, with 15 percent, or more than 35 million people, admitting to rolling over $2,500 or more monthly.

Savings versus spendingWhen asked which areas of personal finance are most worrisome, the top concerns were evenly divided between insufficient “rainy day” savings for an emergency (16%) and retiring without having enough money set aside (16%).  However, the proportion of adults who are spending less when compared to the previous year continues to decline, from a high in 2009 of 57 percent, to a low in 2014 of 29 percent.  This suggests that, although consumers are uncomfortable with their lack of savings, they may have nonetheless continually increased their year-over-year spending.   

Credit Reports and Scores - Most adults have not reviewed their credit score (60%) or their credit report (65%) within the past 12 months.  Close to one in four adults who did not order their credit report in the past 12 months (23%) indicated that they already knew their credit score(s), so they didn’t think they needed their credit report(s).  Although related, credit reports and credit scores are two very different expressions of a person’s credit.  Since each plays a critical role in a person’s financial future, they both merit regular review.  A further reflection of the confusion around credit reports and scores is that more than half of all U.S. adults (54%) mistakenly believe that a standard credit report typically contains a person’s credit score(s).

Knowledge of personal financeForty-one percent of adults gave themselves a grade of C, D or F on their knowledge of personal finance.  Therefore, it is not surprising that, when asked what their money would say to them if money could talk, about one in five (21%) thought it would say “I’m smaller than most of my friends.”  Curiously, about one in five (21%) also thought their money would say “I feel loved and nurtured.” 

Getting started with an IRA? Roth or traditional plans help you save for retirement. 

Nine Tips to Help You Better Understand Your Credit

image

Making financial decisions can be confusing and overwhelming, to the point that you do nothing to prepare for your financial future. But this Financial Literacy Month, we’re helping you understand finance basics so you can make money decisions with confidence.

Step one is understanding your credit. Use these tools and resources to pull your credit report for free and understand how money decisions you make impact your credit.

READ:

 WATCH:

ORDER:

Order the FREE Financial Foundations toolkit to get advice and confidence you need to make sound money decisions.

Recommit To Your Money Goals During Financial Literacy Month

image

Remember when you made that promise to yourself to get a better handle on your finances this year? Well April is the perfect time to reassess your progress on your money goals as part of Financial Literacy Month.

Not sure where to start? Then let us help you!

Start by ordering our free Financial Foundations Toolkit to get the advice and confidence you need to make sound money decisions. This toolkit will teach you:

  • How to save for college or retirement when money is tight

  • What you should do right after a job loss

  • What your insurance rights are in serious medical situations

  • How to avoid financial scams and identity theft

  • And more

Then make sure to follow along all month as we share more tools and resources you can use to manage your finances and set money goals you can achieve. Here’s a sneak peek of what you’ll learn this month:

  • Week one we’ll talk all things credit, scams and consumer protection.

  • Week two you’ll find tools and tips you can use to plan a comfortable retirement.

  • Week three we’ll tackle money management throughout all phases of life.

  • Week four you’ll learn how to invest your money safely and wisely.

Make sure to follow us on Twitter, Facebook or Google+ to get the latest updates or sign up to receive our financial tips delivered directly to your inbox.

If you’re looking for financial tools and resources in Spanish, you can find them at GobiernoUSA.gov.

Read this post in Spanish.