AUBURN, Alabama—Give your finances a checkup and discover if you need to make saving a priority this year. You may discover that you have debt you need to pay down or that you are ready to take the next step in savings. Helping yourself and your family save successfully for the future should be near the top of your priority list for 2018. Remember, you don’t have to make a lot of money to save successfully. Start Small. Think Big.
Alabama Extension Regional Agent Gloria Marks offers the following financial tips to help you save more this year.
Get Out of Debt
The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. How to do it: Find places to cut your spending so that you can pay down your debts faster.
Save for Emergencies
Having an emergency savings fund may be the most important difference between those who manage to stay afloat and those who are sinking financially. In a recent survey, only 49 percent of families said they had extra funds (not including lines of credit) available to pay for an unexpected expense of $1,000. Don’t find yourself unprepared in 2018. How to do it: Save a portion of your tax refund.
Save for Retirement
Many employees turn down free money from their employer by not signing up for a work-related retirement program such as a 401(k) plan. If they did participate, with a dollar-for-dollar match they would likely receive an annual yield of greater than 100 percent on their investment. How to do it: Participate in a work-related retirement program or open up a Roth individual retirement account. Already saving? Increase the amount you save toward retirement by 1 percent in 2018.
Make Savings Automatic
It can be hard to put aside money for savings. But there is an easy way to save money without ever missing it –make your savings automatic in 2018.
Buy a Home and Pay Off the Mortgage Before You Retire
The largest asset of most middle-income families is their home equity. Once these families have made their last mortgage payment, they have far lower housing expenses. How to do it: Almost anyone can afford to own a home with proper preparation. Develop a savings plan to build up money for a down payment at purchase, and with post-purchase emergency expenditures such as needed home repairs.
Savings Strategy: Save a Portion of Your Tax Refund
Tax time is a great time to kick-start or grow your savings for the future! Use the 30 – 40 – 30 plan. Designate 30 percent of your refund to pay off debt and catch up on outstanding bills. Earmark 40 percent for current use. Use 30 percent to jump-start an emergency fund or long term savings. You can use form 8888 to buy a U.S. Savings Bonds. Bonds are a safe and easy way to save for the future.
America Saves is an initiative of the nonprofit Consumer Federation of America that encourages individuals and families to save money and build personal wealth. For more information visit: www.americasaves.org or contact the Alabama Extension regional agent in Family Resource Management and Workforce Development serving your county.