I have debts and expenses – should saving still be a priority for me?
If you are struggling to bolster your savings, you’re not alone:
53% of adult Americans report living paycheck-to-paycheck[1], while another 69% report having less than $1,000 in savings[2]. There are many reasons that this is the case, including:
- Rising costs of living
- High levels of debt, often at high interest rates
- Lack of financial education
- Lack of budget or financial plan
…And more. However, regardless of the cause, the lack of a rainy-day fund certainly has its side effects, from an inability to handle emergency expenses, to delaying medical care, and even failing to retire on time – all of which lead to financial stress.
So, while tackling debts and expenses are of course important, building savings should still be a priority.
What are some steps I can take to start saving?
Leveraging financial literacy tools is a great first step, because a lack of financial literacy is a common issue for those who struggle to save. These resources will allow you to get a picture of your overall financial situation and help you to better understand the impact your spending habits may have on your financial wellness. Financial literacy can also help you create realistic savings goals and practical plans for achieving them.
In addition, 401(k) plans or other employer-sponsored retirement accounts are a smart place to begin putting funds. These accounts are set to be a sound investment with a high growth potential over the course of several years, and the automatic payroll deductions make it seamless to deposit your money each pay period. Plus, with an employer match, you’ll be able to build your overall savings even faster.
Similarly, if you have access to FSA’s and/or HSA’s, you should certainly use them. These savings accounts are both tax-advantaged, and most importantly, must be spent on healthcare related expenses. This ensures that you never have to delay medical care and that you feel less stressed.
Another stress-reducing AND savings-building option is to look to student loan assistance benefits. There are many employee benefits that offer methods for tackling student debt, with or without employer match, and if your employer does offer these options, it is a great idea to utilize the help. This way, you can reduce your debt and ultimately have more money leftover that you can put aside into a rainy day fund.
Finally, check if your employer offers a benefit that builds traditional savings accounts for employees through automatic payroll deductions. Unlike 401(k) plans, HSA’s, or FSA’s, these accounts give you the flexibility you need to put your savings toward whatever you may choose. However like the other benefits, the automatic payroll deduction makes depositing money into a savings account simple, so you are more likely to build a rainy day fund.
Why Kashable?
Kashable low-cost loans are a great alternative to borrowing from retirement savings, helping you to ensure that the savings you have worked so hard to build are left untouched and free to grow over time. Plus, using a Kashable loan to tackle high-interest debt can help you to minimize your expenses over the long term, giving you the opportunity to stow away a little extra each paycheck. Kashable even offers the Financial Literacy tools you need to create a responsible savings plan, whether or not you decide to take a Kashable loan. Learn more at Kashable.com
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Want to learn more about financial wellness? Check out our other videos on 401(k)’s and Credit Scores.
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I appreciate the information shared here. Employer educational benefits are a great way to save on education cost.
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