Find creative ways to save money
For many Americans, paying off debt is their No. 1 concern. But for another sizable percentage of the population, saving money for their futures is their main priority. Putting money away for a financial cushion, down payment on a home, retirement and other goals can be challenging, especially for individuals who may be living paycheck-to-paycheck or stretched thin by their living expenses.
A recent poll conducted by the Northwestern Mutual Foundation shows most people consider themselves savers, but are struggling to meet other obligations that get in the way of saving money. According to the results, 79 percent of respondents said they would rather have $500 to spend in five years, rather than $50 to spend today. In addition, two-thirds of participants said that if they put $500 aside in a savings account today, their money would double in 25 years, as opposed to 31 percent who thought they would only have "a little bit extra."
The study also revealed that young adults were more impulsive with their finances and likely to spend, rather than save, but this scenario diminishes with age.
"Summer break is just around the corner," Northwestern Mutual vice president Rebekah Barsch said. "When homework goes on hiatus and spending opportunities abound, it's a perfect time for parents to help kids understand basic financial concepts like spending and saving. Teaching kids good money habits early on fosters financial freedom in the future."
Finding a money management plan that includes saving money may not be a one-size-fits-all for each person, so individuals should explore strategies that are unique to their own spending habits. For example, consumers who are tempted to spend money in their savings should explore low-risk alternative investments, such as certificates of deposit and money market funds. In other cases, individuals should consider creating a separate savings account that they can transfer money to each pay period and forget about.
Adults who are saving for particular goals may also consider setting up various savings funds for each goal. This allows them to track their progress, and may keep them encouraged when they see their funds growing. Many individuals balk at their savings goals when they feel they are not making headway, but monitoring savings can deter adults from giving up. Financial professionals, such as credit counselors and retirement advisors, may also have some additional tips.