Did you know that most Americans are behind when it comes to their monthly savings plan and retirement financing? Besides, a report by the Economic Policy Institute shows that as of 2016 (the most recent data), Americans in the 56-61 age bracket had a median balance of $21,000 in their retirement savings plan (401K), and thatâ€™s 30 years of their savings.
Creating a monthly savings plan doesnâ€™t need to be difficult and is a great way to organize your income. If youâ€™re starting to plan for your future and retirement, continue reading for some excellent tips.
Starting a Monthly Savings Plan
While a good savings plan can help you start on the road to a better financial future, itâ€™s best to start saving practically. Look at where you are and decide where you want to be in 5 years and further down the road. Commitment is the key to any savings plan that is successful. Here is some practical advice:
Your Financial Status Today
Consider your expenses and current spending patterns. If youâ€™re spending your entire paycheck before getting the next one, chances are high you wonâ€™t be able to put large amounts into savings at a time. If reducing spending isnâ€™t possible, you may want to consider a side hustle to increase your income.
Track Your Expenses
An excellent way to start saving is to track your expenses. There are monthly savings calculators available to help get you started, even this one from Bank of America. Reviewing a few months of your bank statements is another significant way that will help you get a better view of your spending to determine where you can reduce it.
It is essential to reduce your spending and eliminate any debt you may have to clear the road of any deterrents so you can save as much as possible. Changing banks to reduce fees and make check stubs can also help your expenses.
Start a Budget to Save
Now that you can see your monthly expenditures in a snapshot view, itâ€™s an excellent time to organize them into a simple budget. Your budget will compare your spending to what youâ€™re earning. It will help you to stay on track and not overspend. Experts suggest factoring in expenses that donâ€™t occur every month, such as oil changes and other vehicle maintenance.
Setting a goal to save 10 to 15 percent of your income can help you be a financial success.
Put Savings on Automatic
An excellent way to boost savings is to use automated deposits. According to a recent report, about 54% of mobile banking users say they use their banksâ€™ app to deposit their checks. Besides, 52% feel it is an essential part of the app.
The apps also let you set up automatic transfers into your savings that help keep you on track. Over time youâ€™ll see your savings balance growing right on your smartphone.
Start Your Monthly Savings Plan Today
Many say the key to a monthly savings plan is starting it. Review some of these suggestions to get started saving. Your future is in your hands.
We hope this article helped clarify monthly savings plans and how to get organized. Check back for more excellent information here.