Assess Your Savings Progress
VP Grand Mountain Bank
As America Saves Week draws closer, I thought it would be helpful to provide you with a process to assess your savings progress. This assessment will be brought to you in two parts with the first six questions this week and the other six questions next week.
America Saves Week, which runs from Feb. 22 through March 1, encourages and assists individuals to assess their savings progress and take action to advance this progress. Use the questions ” and the resources listed beneath them ” to assess your savings plan. Each of the Web sites listed offers a wealth of valuable financial literacy information.
Do you know your net worth, that is, the dollar amount representing all your assets minus your debts?
America Saves Wealth Calculator: http://www.americasaves.org/back_Page/personal_wealth_estimator.cfm. Discover what your current and future net worth are with America Saves’ Personal Wealth Estimator. By listing your financial and nonfinancial assets and debts, the Personal Wealth Estimator is able to calculate your current and future wealth for 5, 10, 20, 30, 40 or 50 years in the future.
Do you have a personal spending plan with specific goals and plans for achieving these goals?
Department of Labor’s Savings Fitness: A Guide to Your Money and Your Financial Future: http://www.dol.gov/ebsa/pdf/savingsfitness.pdf. Learn how you can start your own financial fitness program that will enable you to live comfortably during your retirement years. The financial fitness steps and tips along the way also help you achieve all types of savings goals. IRAs, savings accounts, dealing with unexpected financial crises ” all are addressed.
Do you have a personal spending plan that allows you to save enough money to achieve these goals?
NEFE’s Create a Spending Plan ” Draw a Spending Map So You Don’t Get Lost. http://www.smartaboutmoney.org. In four short steps, identify income, list expenses, compare income and expenses, and set priorities and make changes ” you can make sure your day-to-day expenses do not distract you from your long-term spending goal. One of the 10 Basic Steps to Getting Smart about money.
Do you have credit card or payday loan debt? If so, are you reducing this debt?
Utah State University Extension’s November 2001 Financial Fitness Fact Sheet: Reducing Credit Card Debt http://extension.usu.edu/files/publications/factsheet/FL_FF-13.pdf. Use this simple table to list all of your credit card debt, and then follow the financial fitness tips listed to help you develop a plan to kick that credit card debt. While it won’t disappear overnight, step-by-step actions will eventually reduce the debt once and for all.
AARP’s Payday Loans Don’t Pay basics, http://www.aarp.org/money/credit_debt/a2002-10-02-FraudsPaydayLoans.html. Instead of considering a payday loan, read the story of Nancy, a consumer who used a payday loan for a quick $200, but ended up paying $500 in fees because she could not afford to pay the loan back. There are alternatives to payday loans and ways to prevent financial emergencies. Additional resources and links are also provided in this tip sheet from AARP. Don’t make the same mistake Nancy did.
Do you spend less than your income and save the difference?
InCharge’s Spend Less Calculator, http://www.incharge.org/Credit_Counseling/Resources/Calculators/SpendLess.aspx. Ever want to know how much extra money you could save each month if you cut out that daily coffee or weekly dinner? Use this handy calculator to determine your monthly savings if you spend less per month. See how eliminating certain budget, utility, and entertainment expenses will help you save big in the long run.
Do you have sufficient emergency savings to pay for unexpected expenses like car repairs and medical treatment?
AICPA’s Emergency Savings Calculator, http://www.incharge.org/Credit_Counseling/Resources/Calculators/SpendLess.aspx. Saving for a rainy day is always important, and with the Emergency Savings Calculator you can calculate how long it will take you to build up your emergency savings fund by taking emergency expenses, living expenses, and insurance deductibles into consideration. Don’t be caught in a lurch, use the calculator and find out how much extra you should save per month to be prepared for life’s unexpected events.
” Content for this article provided by and used with the permission of America Saves Week. Visit their Web site at: http://www.americasavesweek.org/.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.