Studies show most Americans have too much debt and not enough savings. While updated 2020 data from the Federal Reserve Economic Well-Being of U.S. Households report indicates 70 percent of adults would be able to pay an unexpected $400 expense, many Americans continue to face financial hardships in the wake of the global coronavirus pandemic.
As relationship-based lenders, the nation’s community banks have made it a priority to help their communities invest in their financial future by paying down debt and filling their savings coffers to achieve their short- and long-term financial goals.
Savings doesn’t have to be a chore or a burden. With a few simple steps you can start stockpiling a nest egg that will carry you through life’s unexpected twists and turns.
- Pay yourself first. Have money automatically withdrawn from your checking account into your savings or an investment vehicle. Many employers also offer automatic payroll deduction, which is one of the best ways to start and keep saving.
- Create a spending plan. Unlike a strict budget, a spending plan is a guide to help you take control of your finances by tracking where your money goes to help prioritize your spending. In a spending plan, you list expenses, compare them to income, and then make financial decisions accordingly.
- Build an emergency fund. Setting aside just $2.99 a day (the average cost of a daily cup of coffee) for one year can boost your emergency fund by nearly $1,100 annually. If you’ve already met your rainy-day goal, work towards building a three-to-six-months-living-expenses fund.
- Put your tax refund to work. With the average tax refund totaling roughly $2,700 last year, more than three quarters (86 percent) of Americans planned to use their returns for savings or paying off debt. Enhance your future now by using your tax refund to invest in a tax-deferred retirement plan.
Access, safety and earning potential are all important factors to consider when choose where to place your savings. Community banks use the latest technology, offering the freedom to access your money when and how you want.
In addition, community banks offer competitively priced products and services to help put your money to work for you. And because they are locally owned and operated, your money is reinvested back into where you live and work; creating communities of prosperity.
Now more than ever, it’s important to develop good habits to create a financial cushion by making saving a part of your everyday life. Your local community bank can be a resource to help guide you on your financial journey. To find a community bank near you visit banklocally.org.