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