America Saves Week 2022: Five Goals For Building Financial Resilience
This year's America Saves Week focuses on building financial resilience
America Saves Week launches on Monday, February 21st, after two years of tough financial times, particularly for low to moderate-income families and individuals. This year's week-long focus is on building financial resilience.
This week is a great opportunity to brush up on your personal financial skills and create a lasting plan for future financial success. Even if you think you have a firm grip on your finances, America Saves Week is a reminder to check in with your financial situation. For those who feel a little out of financial control, this week offers a lot of financial tools and advice to help get yourself back on track. Each day will have a new focus, follow along to get your own finances in order.
Monday: Make it Automatic
Creating an automatic plan for your recurring bills will not just take that job out of your hands, but remove the chance of you simply forgetting to pay a bill on time. Late bill payments come with late fees and possibly a ding to your credit score. Take the time to set up automatic payments with your bank, and never miss a payment.
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While you're paying bills, don't forget to pay the most important person – you! Have you ever heard the saying “Pay yourself first”? Set up a separate savings account and create an automatic payment each month that zips away some of your income for saving before you even have the chance to miss it.
Goal: Set up automatic payments for both recurring bills and savings.
Tuesday: Plan for a Rainy Day
Car repairs, unexpected medical bills, job loss, and broken refrigerators are all a part of life. Financial emergencies are not a matter of ‘if' but ‘when' they will happen to you. If you don't have an emergency fund, now is the time to start one. Ideally, you'd need 3-6 months of living expenses set aside for emergencies. This seems like a lot however, don't feel overwhelmed, start small. Set aside a small amount of your income each month (making it automatic of course!) and be consistent. Small and regular payments will gradually add up. The key is to not use this money except for an emergency. If you do need to use some or all of it, work to replace it. Keep it in a separate account where you can't easily access it for spending money. Having an emergency fund, even a small but growing one will help you sleep well at night knowing you can weather a financial storm.
Goal: Start an emergency fund
Wednesday: Plan for Retirement
It's never too early or late to start planning for your retirement. If you have a 401K through your employer, you need to be taking advantage of it. Payments into these accounts are before tax and are taken out of your paycheck before you even see it. If your employer has a matching scheme in place, then make sure you are depositing enough of your paycheck to maximize the amount that your employer is willing to contribute. For example, if your employer will contribute up to 4% of your paycheck then you need to also contribute at least 4% for them to match the contribution.
If you have your retirement plan in place, use this week as an opportunity to check in with your settings. Can you contribute a little more? Are you happy with the investment track you're enrolled in within your fund? While automatic payments are hands-free, they shouldn't be left unsupervised! Check-in with your finances at least once or twice a year to ensure you're still in the best situation for your income and lifestyle.
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If you don't have access to a 401K through your employment, consider a Roth IRA. You can make contributions to this type of account after tax; however the earned interest is tax free when you start to make withdrawals.
Goal: Start saving for your retirement or check in with your current plan.
Thursday: Reduce your Debt Load
Set aside an hour or two to go over all of your debts. Gather all the documents and get a realistic idea of the amount you owe and who you owe. Take note of the interest rates charged by each of your creditors. Are you currently paying more than the minimum amount due each month? Set a goal to reduce your debt by choosing a payment method for paying off your debts. Choose to pay down one debt at a time with extra payments, while still maintaining the minimum payments on your other debts.
Avalanche debt repayment: Focus on paying off the debt that has the highest interest rate. Put as much extra money towards that one debt as you can. Continue to pay extra on this debt until the debt is paid off. Then shift your focus to the debt with the next highest interest rate. Use the money that you were paying on the first debt in addition to the minimum payment to steadily pay off this debt. Continue working on one debt at a time until your debts are gone.
Snowball debt repayment: In this method of debt repayment, focus on the debt that has the smallest amount owing, regardless of the interest rate. Pay as much extra on this debt until it is paid off. This method provides more instant gratification than the avalanche method because you're focusing on the smallest debt. Just as you do with the avalanche method, move on to the debt with the next smallest amount owed and pay that off.
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As with most financial success plans, it is the small and consistent actions that create the long term success. If you're struggling to pay even the minimums on your debts, you may benefit from speaking with a Certified Credit Counselor. Navicore is committed to providing unbiased and compassionate financial guidance and taking as much time as you need to get your finances back on track. Call 1-800-992-4557 to speak with a counselor.
Goal: Create a plan to pay down your debt
Friday: Do it Together
Whether you're learning something new during America Saves Week or just brushing up on your personal finance skills, include your family in the process. Explaining the importance of financial education and mindfulness to your children will set them up for their own financial success. Explain why you're interested in learning about retirement and emergency funds and why they are important. Don't underestimate the financially responsible example you're setting for your children.
Goal: Provide a good example of financial responsibility for your family.
Lori Stratford is the Digital Marketing Manager at Navicore Solutions. She promotes the reach of Navicore's financial education to the public through social media and blog content.