Budget & Save For The Future With Our Top Money Saving Tips

You’re putting in the work to earn money for necessities and ideally to save for the future. But is your money working for you? While it’s not always easy to do, budgeting and saving are a prime opportunity to reach your long-term financial goals. Whether it’s saving for a down payment on a house, another large purchase or even for peace of mind to cover an emergency that arises, setting funds aside in a secure, interest-bearing savings account only adds to the possibilities in your future. As your local bank, we’re invested in the communities we serve and know what matters to the families living alongside us as our neighbors. No matter what you’re striving for, we’re here with the savings solutions and money saving tips to help you get there. But first, let’s look at best practices to help make saving a habit you can continue to develop over time along with your overall financial well-being.

What Percentage Of Income Should You Save?

While there is no single answer to determine successful saving for the future, financial experts commonly suggest aiming for 10% to 20% of your take-home pay for savings each month. That means if your household net income (i.e. your take-home pay) is $60,000 a year, saving 10% would equal $6,000 a year, or $500 a month. If you’re aiming for 20%, that’s $12,000, or $1,000 a month. Of course, only you know what personal financial stability looks like for you and your family, and any amount you’re able to set aside is something to be proud of. Or perhaps you’re on an accelerated schedule to achieve a fixed financial goal and need to shoot for a higher percentage each month. Either way, knowing your short- and long-term financial goals is a smart place to start.

How To Approach Saving For The Future

Every individual and family has unique savings goals, but the overall needs for financial well-being are generally the same. To ensure you’re saving for the future but also creating a cushion for things that come up in the short-term, consider saving for retirement, setting aside money in an emergency savings fund and saving a portion for discretionary spending. These three savings priorities will best position you for personal financial stability and well-being not just today but throughout your life.

Build An Emergency Savings Fund

An emergency savings fund is exactly what it sounds like: a savings account you only dip into for emergencies such as navigating a job loss or covering an unexpected expense like medical bills or damage to your home. Best practice is to grow your emergency fund until you have enough to support you for at least three to six months should you go without income or face financial strain. In addition to a traditional savings account, a certificate of deposit (CD) is another high-yield option to earn interest on your emergency savings for a set time period.

Prioritize Saving For Retirement

Even if retirement still seems a long way off, you know you’re going to need money when you do quit working. Start saving for retirement early in your career to ensure your future self can reap the benefits of all of your hard work. If your employer offers a retirement plan like a 401(k), be sure to take advantage and contribute as much as you can, especially if they offer matching funds. If you don’t have a retirement plan through work or want to save supplemental income, consider an individual retirement account (IRA) from a trusted financial institution. Money placed in retirement accounts is typically invested in assets like mutual funds with the potential to grow over time.

Support Your Ongoing Financial Well-Being With Discretionary Funds

Once you’re sure your immediate and long-term personal financial stability are secure, don’t forget to secure money in savings for all of the things that make life enjoyable in the meantime. Discretionary savings can go directly toward you and your family’s goals, like funding a down payment for a home or planning a family vacation. The rest is to be used as it sounds: at your discretion! To curb unnecessary spending, just ensure larger investments contribute to your overall financial well-being, and remember you’ll still need to be ready for unexpected expenses that may come up in the future.

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3 Steps To Better Budgeting & Saving

Now that you have a better idea of how much to save and what you’re budgeting and saving for, consider tried-and-true tips to make saving money a habit. Saving for the future can be built into your daily financial habits through regular assessment of your goals, assignment of money toward those goals and automation to start saving without even thinking about it. Follow these general steps to set yourself up for success:

1. Assessing - Start by taking a look at your income, your expenses and your goals. In the best of all worlds you’re making more than you owe and you can put that extra money into some type of savings account to help your money grow.
2.  Assigning - Next, figure out how you’re going to save your money to meet those goals. This is where you factor in regular savings for an emergency fund, retirement account and discretionary spending. 
3. Automating - Finally, set up regular transfers of money into your various savings accounts so you don’t have to think about it every time you get a paycheck. Ask your employer about setting up automatic deposits from your paycheck. You can also set up automatic transfers directly from your online or mobile banking account. Based on your initial needs assessment, you can decide how much money you need in your checking account to cover planned expenses and bills and how much you can allocate to savings.

For example, if you are able to reach the 20% savings threshold from your income, maybe you assign 5% of your paycheck each month to your retirement account. Another 10% can be funneled into an emergency savings fund, and the last 5% can go into your discretionary savings account. Once that’s done, the money will automatically go into your respective accounts each time you’re paid. When you open an account with Rivers Edge Bank, you gain access to all of our online and mobile banking features, meaning you can monitor spending and deposits in real-time, set up transaction and balance alerts, plus schedule transfers between accounts as needed. Automation is a hands-off way to stick to a budget and make saving a habit, and our mobile banking solutions give you the ability to effortlessly keep it top-of-mind.

Money Saving Tips To Help Gain Personal Financial Stability

Ultimately, building long-term personal financial stability is about consistent, smart habits, including establishing your savings account or even a portfolio of savings accounts, prioritizing your goals and contributing money toward them appropriately. Hopefully you’re feeling more confident about your ability to save for the future, but we’ll leave you with a few last money saving tips to help your new habits stick:

• Track your spending and stick to a budget: Use a budgeting app, a spreadsheet, a notebook or whatever method works for you to stay on top of your spending. Convenient online banking features at Rivers Edge Bank track transactions for you so you can quickly access your spending habits.
• Cut unnecessary expenses: If you’re giving in to too many “want-to-haves” to the point it’s impacting your ability to afford your “need-to-haves,” take the time to evaluate where you can cut back. Sacrificing a few trips to your favorite takeout spot could be the difference between a deficit and savings for the month.
• Set short-term goals: Keep yourself motivated and carry momentum forward by establishing short-term savings goals. Whether you have a specific dollar amount in mind or want to consistently set aside a certain percentage of your income every month, celebrate your wins along the way!
• Pay off high-interest debt: You can’t always avoid debt, but you can lessen your debt burden. Enable long-term savings by paying down high-interest debt like credit cards first so you’re not spending as much to keep up with accruing interest.
• Utilize a high-yield savings account: Earn more from your savings by making your money work for you in a high-yield savings account. Check out savings solutions from Rivers Edge Bank to take your nest egg to the next level.

Rivers Edge Bank Is Your Partner On The Journey To Financial Well-Being

If saving isn’t part of your routine yet, talk with our team about opening an account to get started. Visit your local Rivers Edge Bank or contact us online to learn more about our savings solutions and convenient online banking experience helping you mindfully save for the future. Here’s to personal financial well-being and stability in your future!

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