Five Saving Strategies

1. Pay Off High-Cost Debt

The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. For example, if you have a $3,000 credit card balance at 19.8%, and you pay the required minimum balance of 2% of the balance or $15, whichever is greater, it will take 39 years to pay off the loan. With accumulating interest, you will pay more than $10,000 in interest charges.

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2. 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. Without an emergency fund, you may find that need to turn to high-cost credit cards or payday loans to cover the amount you owe. Borrowing from these types of lenders could make it difficult for you to payback your debt and save successfully.

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3. Save for Retirement

Saving now for retirement will ensure that you have enough money to live a comfortable lifestyle when you stop or reduce the amount of hours you work. You may be able to save for retirement through your workplace through a 401k plan or you can save on your own by putting money in an Individual Retirement Account (IRA).

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4. Save Automatically  Through a Monthly Transfer from Checking to Savings

These savings will provide funds for emergencies, home purchase, school tuition, or even retirement. Almost all banking institutions will, on request, automatically transfer funds monthly from your checking account to a savings account, U.S. Savings Bond, or stock mutual fund. What you don't see, you will probably not miss.

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5. 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. They also have an asset that can be borrowed on in emergencies or converted into cash through sale of the home.

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Tip of the Day

  • Written by Katie Bryan | November 20, 2013

    Don't be left in a lurch. Plan for your #holiday #spending! http://ow.ly/r0Sg0

Saver Stories View all »

Learning to Save

Written by Katie Bryan | October 28, 2013

Kisha Barns’s financial situation was undisciplined, unrestricted, and impulsive before she came into contact with her local America Saves campaign, Charlotte Saves.

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Challenging Herself to Save

Written by Sara Cooper | April 15, 2014

It all started when Marchale Burton overheard Alabama cooperative extension colleague Isaac Chappelle, coordinator of Alabama Saves, explaining how saving just a little bit – even change – is all it takes to become a saver. “I thought about that,” Burton said, “and wanted to see if it would work.” So, she challenged herself to see how much change she could save.

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Taking Steps toward Financial Fitness

Written by Tammy Greynolds | November 7, 2014

Nicky Vasquez learned about Virginia Saves when she attended her first class with Bank On Virginia Beach. The instructor shared how important it was to have a written savings goal, and the entire class joined Virginia Saves as the first step toward financial fitness.

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