Western Bank and The Independent Community Bankers of America® (ICBA) want to remind consumers during America Saves Week that building a nest egg can help alleviate stress and provide additional financial security during times of unexpected financial hardship.
Seventeen percent of adults cannot pay their current month’s bills in full, another 12 percent would be unable to pay their current month’s bill if they also had an unexpected $400 expense, and nearly 27 percent of Americans would sell something they own or borrow money to pay the unexpected expense, according to a Federal Reserve Economic Well-Being of U.S. Households report.
Savings is a key component in building wealth—not debt—and achieving financial freedom. As relationship-based lenders, we ask that our community members take the pledge to invest in their future by paying down debt and filling their savings coffers to achieve their short- and long-term financial goals.
Western Bank and ICBA offer the following tips to help consumers boost their savings:
- Pay yourself first. Many employers offer automatic payroll deduction, which is one of the best ways to start and keep saving. Use those funds to build a retirement fund.
- 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 so you can prioritize your spending.
- Utilize the different budgeting tools available at your bank to help with your spending plan or budget.
- Build a cushion. Strive for an emergency savings of six to nine months of living expenses.
- Put your tax refund to work. With the average tax refund totaling roughly $3,000, more than half (52 percent) of Americans plan to use their returns for savings, investing or paying off debt.
Other important factors about your savings:
Safety. How safe is your money? The FDIC insures deposits up to $250,000 per depositor and $250,000 for certain retirement accounts. No one has ever lost a penny of FDIC-insured funds.Start small. Setting aside just $63 a month (the average cost of a daily cup of specialty coffee) for one year can boost your emergency fund by $756 annually.
“Community banks are good stewards of their customers’ financial health, helping to finance major purchases, and build financial wealth,” ICBA President and CEO Rebeca Romero Rainey said. “We encourage consumers to reap the full benefits relationship banking and put their hard-earned dollars to work at their local community bank.”