The Main Objectives

When saving money, the main objectives include knowing where the money that you have is going, to set goals that are clear and may be realistically accomplished, and to automate the entire process of saving. Actionable steps are imperative. The following outline some basic steps to help in getting started with your money saving endeavor:

1. Track Spending – To start with, you will want to record every single expense that you have. It does not matter if it is something small like a coffee purchase or something larger like a smart television. You may use a spreadsheet, go simple and use a notebook, or go digital and use an app. The goal is to see where your money goes each month and help you to identify areas that you may cut back on spending.
2. Budget Creation – The next step is to create a budget. This is a specially-designed spending plan that aids in the allocation of your income towards both your spendings and your savings. In most instances, financial advisors recommend what is called the “50/30/20 Rule”, that is, spend a total of 50% of the take home pay that you have on your needs, spend only 30% on your wants, and then focus on savings and the repayment of your debts with the last 20%.
3. Set Specific Goals – If you have a desire to save money, you should have a specific goal or even several specific goals. You may want to create an emergency fund that includes up to 6 months of earnings so if something happens to your main earnings, you can have an account to fall back on. Another goal may be to save up for a down payment on a home or save up for a down payment on a vehicle. Another goal includes planning for your retirement.
4. Pay off Debt with High Interest Rates – When you want to make the most of your money, it is important that you pay off any debt that you have that carries a high interest rate. Examples include credit card balances. The money that is saved can then be directed to your savings account – where it can earn interest.
5. Pay Yourself First – You should have both a checking account and a savings account. Set up an automatic transfer from the checking account to the savings that you have each payday. This will allow you to invest the money into your savings rather than in your checking account where you can easily spend it.
6. Acquire a High Yield Savings Account – The next step to meeting your financial objectives is to open up a high-yield savings account. These types of accounts earn a higher interest rate than the traditional savings accounts that are available for consumers. Because of the higher interest paid on the balance, your money will grow quickly.
7. Separate the Bank Accounts – Many financial advisors recommend keeping your checking account and your savings account at two different banks. The reason being is that you will be less tempted to take money from your savings account to make purchases on impulse.
8. Windfalls Should Be Saved – If you have unexpected windfalls – such as a bonus from work, gift money, or an unexpected tax refund, you should save them by placing them in your savings account. It is not like you will miss the money because you weren’t expecting it to begin with.

How to Reduce Spending

There are several unique strategies that you may indulge in that will aid in the reduction of spending. The following outlines these ideas:

1. The 30-Day Rule – If you want to buy something that is considered to be “non-essential”, you should wait 30 days before officially making the purchase. This will ensure that you are not impulse buying. Additionally, it gives you the opportunity to think more about the purchase. If you do not want to do the 30-Day Rule, you could make it any time frame that you want – 24 hours, 72 hours, two weeks – the choice is yours. Just make sure that once you make the choice that you stick to it.
2. Shopping Lists – When the time comes to buy groceries and other household staples, it is important that you make it a habit to create a shopping list. When creating the list, be sure to see if you can obtain any coupons for what you need, and/or look up any loyalty program benefits. Go through the pantry, fridge, and the freezer and only put items that you truly need on the shopping list. Once you get to the store, be sure to stick to the list and do not indulge in any impulse purchases.
3. Eliminate Subscriptions – In this day and age, it is quite likely that you have at least one monthly streaming or gaming subscription. Look at your bank statement and see if you are being charged for memberships and other charges that you no longer want. If the answer is “yes”, you may cancel those subscriptions and/or services. If you have phone and internet bills, it is possible to call and negotiate a lower rate on your services.
4. Cook at Home – As simple as it is to run out to grab a bite to eat, it may prove to be extremely costly. If you want to save money, prepare and cook the food that you eat at home. This includes your lunches that you take to work. While there are many delivery services that make eating out a simple option, those, too, come with fees.
5. Cut Down on Energy Costs – Energy costs are often among the highest of expenses for people. You should unplug items when not in use to prevent the accumulation of phantom power. You should use thermostats, update your home’s insulation, lower the temperature on your water heater, reduce the amount of laundry that you do each week and pay attention to other activities that could have a detrimental impact on the amount of money that you may for energy. You may even consider the integration and usage of solar panels.
6. Use Retirement Accounts That Offer Benefits – You should make use of retirement accounts offered by your employer. Typically, these come with tac advantages and they may even include matching funds. If you allocate part of your income, you will not miss the money too much. The sooner that you start taking advantage of this type of account, the sooner you can take advantage of compound interest on the account. If your job does not offer these types of accounts, you should set up an Individual Retirement Account. You may do this with a financial institution. Just remember to make regular transfers into it so you reap the highest level of rewards.
7. The 52-Week Reward – This particular award is often referred to as the “Savings Challenge”. Basically, with each week in the year, you put that mount of money into your savings account to accumulate interest. For example, the first week of the year, you would put in $1.00, the second week, $2.00 and so on and so forth until you put in $52 on week 52.

How Many Americans Have at Least $100,000 in savings?

According to studies, up to 26% of all Americans have at least $100,000 or more saved. Many households have achieved this goal, especially those that include older people. Young adults account for only about 2.1%.

Contact Us Today

If you are interested in saving money, we here at Somerville Bank are standing by to assist you. We offer a wide range of unique services and plans across several locations – for your convenience. You will find that we offer services and features for both consumers and for businesses. We also offer credit cards, identity theft services, online banking, Zelle, and more!

Our bank was officially established in the year of 1910 in the Southwestern region of the State of Ohio. All the way to the year of 1989, our establishment was the smallest of nationally chartered banks in the United States. It has now grown to a total of seven full-service branch banks. April 2010 celebrated its 100^th anniversary!

We were once called Somerville National Bank; however, we recently changed to Somerville Bank. We pride ourselves in having over 30 + years of banking experience. All of our current management team has been with us for 20+ years. If you would like to learn more about savings or products that will render you successful in your savings goals, contact us at one of our branches today: https://somervillebank.net/locations/

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Many Benefits Abound

Most individuals know and understand the importance of saving a portion of the income that they receive; however, not many understand all of the benefits associated with taking this step.

Saving is one of the most important of all habits.

Saving assists in covering future expenses, managing your day-to-day finances, planning for life events, handling financial emergencies, and overcoming financial stress. Below are three ways in which saving money can help you thrive in an economically-challenging world:

1. Paying for Life Goals – By saving money, you will have funds available for the life goals that you have. This may include purchasing a new car, buying a home, or even pursuing more education. You should list the life goals that you have and then outline a saving strategy to achieve those goals.
2. Employment Flexibility – By saving money, you will find that you have a safety net of financial support in gaps that occur with employment. These may include taking time off due to mental or physical health complications, family emergency, schooling, or issues where you are laid off or fired. In addition to this, saving allows you a cushion if you want to take classes to advance your career or would like to switch to a different job or a career.
3. Hardship Assistance – A significant aspect of savings is to develop an emergency savings fund. This will help ensure that you are able to face various expenses in the event of unexpected life events. Examples include natural disasters, unemployment, the need to make repairs to a vehicle and/or a home, and/or medical issues that arise. By having a savings account set up and money in it, you will find that you are better able to ease through the hardships that are known to occur throughout life.

Savings Accounts for Specific Purposes

The first step to saving is to determine what you are saving for. When you figure that out, you may then set up savings accounts for specific purposes. There are many free savings accounts offered in today’s world to make this easier. In addition to this, standard savings accounts offered by banks typically just require a small minimum deposit and a small minimum balance.

If you do not maintain a minimum balance, you may have to pay a small monthly fee.

For example, here at Somerville Bank, you may obtain a savings account with a $100 minimum deposit. If you maintain a $100 minimum balance each month, you will not have to pay a service fee. If you do not maintain this balance, you will just need to pay a small service fee of $2.50.

The following outlines the various types of savings accounts that you may set up for yourself:

1. Property and Income Tax Account
2. Vehicle Repairs
3. Home Repairs
4. Employment Savings
5. Emergency Fund
6. Home Purchase
7. Vehicle Purchase
8. Vacation
9. Medical

Of course, you may combine these accounts into one. You may come up with some other type of savings account. The choice is yours.

Once you have your account or accounts set up, come up with a percentage of your income that you will designate to each. For example, if you make $1,000 a week, you may elect to donate 10% to each savings account. Let’s say you have one account for home expenses, one for educational expenses, and one for medical expenses. You would take $100 and put it in each account for a total of $300.00.

Do not fret if you are unable to put back a large percentage of your income into your savings account or accounts. By consistently adding to the account and the compounding of the associated interest with the account, you will quickly find the money accumulates quickly.

Start with a little and work your way up.

Start with a set amount on a regular basis so that you are paying yourself first. When the opportunity arises, add more and more. Remember, any amount is good. Higher amounts are great. Ultimately, saving is saving – regardless of what you save.

Auto Savings

Did you know that if you have your earnings directed deposited that you can request your employer to put in a portion of your paycheck into a savings account that is insured by the FDIC? In addition to your employer doing this, you can request that the financial institution that you bank with do this, too.

Consider a Retirement Account

If you work for an employer, look into retirement accounts that may be offered through the company. In some instances, if you get one of these accounts, the employer may offer matching contributions – which means whatever you put into it, they will put into it, too. These accounts come with compounding interest.

You may also want to look into setting up an IRA (Individual Retirement Account) for yourself. Once you have this set up, be sure to set up automatic transfers from your checking into into the IRA.

If you have neither of these (or, both), you may set up a savings account specifically for your retirement. If you elect to do this, remember to have payments directed deposited into your account.

Things to Remember

When attempting to save money, remember the following:

1. Make it a goal to start saving until it becomes a habit. Always remember – no matter what bills and debts you have – to pay yourself first by depositing money into a savings account or multiple savings accounts.
2. Track all that you invest in, spend, and that you save. This will allow you to monitor what you own and where your money goes.
3. Outline both your short-term goals and your long-term goals. Then, put money into your savings account or accounts so that you may accomplish those goals.
4. You should immediately create an account that may be used for emergencies and unexpected events that you experience throughout life. It does not matter if it is an unexpected repair, trip, or medical issue that pops up, if you have an emergency fund set up, you will be able to face the issue head-on.
5. There are certain events that you should focus on saving for. These include the education of your children, your retirement, and emergencies. You may elect to set up one savings account, but it is advised that you set up an account for each thing or event that you are saving for in order to know where your money is going and how much you have towards each thing or event. Typically, if you keep a minimum amount in each account, you will not have to pay additional monthly fees for additional savings accounts set up at certain banks – like Somerville Bank.

Steps for Saving More Money

There are many steps that you may take to save more money. The truth of the matter is, most of us have more cash than we realize. In order to discover it, you simply have to find out what you have, how you spend that, and how much you save. In addition to the steps and strategies that we have outlined in this guide, the following will help you in saving more money, over time:

1. Create a budget. This helps you find out where you are with your money and will help you get to where you want to be.
2. Analyze your debt and figure out a plan for eliminating it. Eventually, you will transition from paying debt to paying yourself.
3. Make certain that you set goals when it comes to the money that you save. It is important to know why it is important for you to save money. If you have a strong “why”, you will definitely have a strong “try”.
4. Automate your savings by having direct deposit set up in your checking account that goes right to your checking account.
5. If you have subscriptions, memberships, and other similar expenses, cancel and save that money instead.
6. Focus on planning meals and avoid eating out. Do not waste food, prepare food ahead of time and freeze, focus on meals that use the ingredients you already have, and create and stick to a grocery list.
7. Check into the rates you pay on your insurance. Also, contact debtors – credit cards, loans, etc. – and ask if you may pay less towards interest.
8. Reduce your energy costs. Take short showers, use energy efficient bulbs and appliances, adjust your thermostat and water heater, etc. This will put more money into your pocket, which will put more into your savings.
9. Use apps that give you cash-back, coupons, and other perks.
10. Refinance your mortgage and your car payment with a lower interest rate.

There are many ways to save! If you have an interest in a savings account, contact us here at Somerville Bank for immediate assistance: https://somervillebank.net/

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