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Most Americans Are Not Saving for Their Futures

7 years ago

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It is no secret that most Americans don’t have enough savings to cover their retirement – or even costly emergencies. This has always been a problem, but it became much worse during the 2008 financial crisis, and even when people started to make money again years later, many halted their savings plans because they lost all their retirement and even their homes. Living without savings can create a lot of anxiety about the future, but know that you are not alone. Below are a few tips to keep in mind as you plan for retirement – or any savings for that matter!

1)      Pay yourself first. If you haven’t heard this before, then think about your retirement as if it is just another bill. That means you put it on your monthly list, and if possible, you pay that first before the rest of your electricity or anything else. You know what your standard bills are each month and the amount of spending money that you like to have. The truth is, and this goes especially for business owners, if you don’t pay yourself first, there’s a good chance you’ll spend it and end up with nothing left at the end of each month.

2)      Get an app. Simple smartphone applications like Mint, Pocketguard, and You Need a Budget, are designed to easily keep track of your expenses so that after a few months, you have a clear idea of what you are spending. Seeing the real numbers can change money habits in an instant. For example, if you eat out a lot and look at the totals, it could add up to a great trip over a few months. If you were wanting to enjoy a great vacation, you might slow down on the expensive dining, or if you’re like me, the fancy shoes! You can find the best 14 Budget Apps for 2017 here.

3)       Biz Owners. If you are a business owner, make sure you separate your business from your personal expenses. Many entrepreneurs intermingle their finances with their company and lose sight of actual profits and taxes, and end up short at the end of the year in both the tax and the savings. This is easy to avoid by simply keeping two bank accounts, one for work and one for personal.

4)      Joint Accounts. Joint accounts can cause all kinds of sticky situations with spouses and significant others. Consider having one joint account that is only for the basic bills you pay together. This could be rent or mortgage, tax, utilities, groceries etc. How you contribute to that account is up to you. Are you going to each put in 50 percent? Or are you going to base how much each person puts in to that account based on their salary? If you both agree then the percentages are not important. What IS important is that you both save each month, no matter how big or small that dollar amount is (assuming that both of you work). I’ve found in my practice that when clients take this advice, there are fewer arguments around money and spending.

5)      Fear about money. Most people fear talking about money and their future money, but the truth is that there is plenty out there, and there are plenty of financially savvy investments and habits that you can pick up. By working with the right professionals and doing your due diligence, you will have a much better view of what your future and your money have in store for you.

Holly Signorelli, CPA and Financial Advisor

 

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January 17, 2024

This material is prepared by Cabana LLC, dba Cabana Asset Management and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This material may only be distributed in its original format and may not be altered or reproduced without the prior written consent of Cabana. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.  

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Commonly used index/benchmark definitions:  

All indices and categories are unmanaged and an individual cannot invest directly in an index or category. Index returns do not include fees or expenses. Benchmark indices will likely materially differ from Cabana’s portfolio strategies. Detailed information as to how the returns are calculated can be obtained online from the following link: https://thecabanagroup.com/disclaimers/performance-reporting-methodology/. 

Morningstar’s Moderate Target Risk index  follows a moderate equity risk preference and is based on well-established asset allocation methodology from Ibbotson Associates, a Morningstar company.  

Morningstar’s Tactical Allocation category includes portfolios that seek to provide capital appreciation and income by actively shifting allocations across investments. These portfolios have material shifts across equity regions, and bond sectors on a frequent basis. 

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The Nasdaq Composite Index is a market-weight capitalization index that covers more than 3,000 stocks listed on the Nasdaq Stock Market. What is the Nasdaq Composite, and What Companies are in It? | Nasdaq