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8 Simple Ways to Save Money
Americans’ Outlook on Retirement Darkens to 11-Year Low
Why a Federal Retiree Might Consider a Reverse Mortgage

8 simple ways to save money

Saving is easier when you have a plan—follow these steps to create one

Sometimes the hardest thing about saving money is just getting started. This step-by-step guide can help you develop a simple and realistic strategy, so that you can save for all your short- and long-term goals.

1) Record your expenses
The first step to start saving money is figuring out how much you spend. Keep track of all your expenses—that means every coffee, household item and cash tip as well as regular monthly bills. Record your expenses however is easiest for you—a pencil and paper, a simple spreadsheet or a free online spending tracker or app. Once you have your data, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. Use your credit card and bank statements to make sure you’ve included everything.

2) Include Saving in Your Budget
Now that you know what you spend in a month, you can begin to create a budget. Your budget should show what your expenses are relative to your income, so that you can plan your spending and limit overspending. Be sure to factor in expenses that occur regularly but not every month, such as car maintenance. Include a savings category in your budget and aim to save an amount that initially feels comfortable to you. Plan on eventually increasing your savings by up to 15 to 20 percent of your income.

3) Find Ways to Cut Spending
If you can’t save as much as you’d like, it might be time to cut back on expenses. Identify nonessentials, such as entertainment and dining out, that you can spend less on. Look for ways to save on your fixed monthly expenses, such as your car insurance or cell phone plan, as well. Other ideas for trimming everyday expenses include:

Search for free activities
Use resources, such as community event listings, to find free or low-cost entertainment.

Review recurring charges
Cancel subscriptions and memberships you don’t use—especially if they renew automatically.

Examine the cost of eating out vs. cooking at home
Plan to eat most of your meals at home, and research local restaurant deals for nights that you want to treat yourself.

Wait before you buy
When tempted by a nonessential purchase, wait a few days. You may realize the item was something you wanted rather than needed—and you can develop a plan to save for it.

4) Set Savings Goals
One of the best ways to save money is to set a goal. Start by thinking about what you might want to save for—both in the short term (one to three years) and the long term (four or more years). Then estimate how much money you’ll need and how long it might take you to save it.

Common short-term goals: Emergency fund (three to nine months of living expenses), vacation or down payment for a car

Common long-term goals: Down payment on a home or a remodeling project, your child’s education or retirement

Quick tip
Set a small, achievable short-term goal for something that’s fun and goes beyond your monthly budget, such as a new smartphone or holiday gifts. Reaching smaller goals—and enjoying the reward you’ve saved for—can give you a psychological boost, making the payoff of saving more immediate and reinforces the habit.

5) Determine your financial priorities
After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. For example, if you know you’re going to need to replace your car in the near future, you could start putting away money for one now. But be sure to remember long-term goals—it’s important that planning for retirement doesn’t take a back seat to shorter-term needs. Learning how to prioritize your savings goals can give you a clear idea of how to allocate your savings.

6) Pick the right tools
There are many savings and investment accounts suitable for short- and long-term goals. And you don’t have to pick just one. Look carefully at all the options and consider balance minimums, fees, interest rates, risk and how soon you’ll need the money so you can choose the mix that will help you best save for your goals.

Short-term goals
If you’ll need the money soon or need to be able to access it quickly, consider using these FDIC-insured deposit accounts:

  • A savings account
  • A certificate of deposit (CD), which locks in your money for a fixed period of time at a rate that is typically higher than that of a savings account

Long-term goals
If you’re saving for retirement or your child’s education, consider:

  • FDIC-insured individual retirement accounts (IRAs) or 529 plans, which are tax-efficient savings accounts
  • Securities, such as stocks or mutual funds. These investment products are available through investment accounts with a broker-dealer

    7) Make Saving automatic
    Almost all banks offer automated transfers between your checking and savings accounts. You can choose when, how much and where to transfer money or even split your direct deposit so that a portion of every paycheck goes directly into your savings account. The advantage: You don’t have to think about it, and you’re less likely to spend the money instead. Other easy savings tools include credit card rewards and spare change programs, which round up transactions to the nearest dollar and transfer the difference into a savings or investment account.

    8) Watch your savings grow
    Review your budget and check your progress every month. That will help you not only stick to your personal savings plan, but also identify and fix problems quickly. Understanding how to save money may even inspire you to find more ways to save and hit your goals faster.

    Remember that securities are not insured by the FDIC, are not deposits or other obligations of a bank and are not guaranteed by a bank. They are subject to investment risks, including the possible loss of your principal.

     

    Save Your Money
    Senior Woman Grocery Shopping

    Americans’ Outlook on Retirement Darkens to 11-Year Low

    By Matt Egan, CNN
    Updated 2:07 PM EDT, Thu May 25, 2023
    gpointstudio/iStockphoto/Getty Images/FILE

    CNN  — 

    In the latest sign of economic pessimism, Americans are growing increasingly concerned they won’t be able to retire comfortably, according to a Gallup survey shared first with CNN on Wednesday.

    Just 43% of nonretired adults think they will have enough money to live comfortably when they retire, according to Gallup. That’s the lowest level for that metric since 2012.

    Americans’ retirement confidence has been noticeably shaken in recent years. The percentage of adults expecting to live comfortably in retirement is down by five percentage points over the past year and ten percentage points since 2021.

    Less affluent Americans are especially concerned.

    A record-low 19% of lower-income adults expect to live comfortably, according to Gallup, which began tracking these measures in 2002. A record-high 88% express worry about having enough money to retire.

    ‘Rather grim’

    Gallup said the outlook of non-retirees tends to swing in tandem with the national economic climate.

    Mohamed Younis, Gallup’s editor in chief, told CNN on Wednesday that the overall retirement numbers are “rather grim” and reflect lingering concerns about the high cost of living, the safety of money in bank accounts and the risk of a recession.

    The high cost of living makes it harder for families to save for retirement.

    “People are really feeling the pinch. Even as the rate of inflation has slowed down, people’s feel of the crunch of inflation hasn’t,” said Younis.

    The Gallup poll, conducted from April 3 to April 25, finds that women are much more concerned about their retirement situation.

    Just 36% of women expect to have enough money to retire comfortably, compared with 50% of men.

    36% of middle-income adults expect to retire comfortably

    Younger Americans are more optimistic about their retirement outlook, with 54% of those aged 18 to 29 saying they expect to have enough money to live comfortably. But just 38% of those aged 30 to 49 say the same and 39% of those 50 to 64.

    Americans’ views on retirement vary significantly based on their income levels.

    While just 19% of nonretired adults expect to have enough money to retire comfortably, Gallup said 36% of middle-income adults do and 65% of upper-income adults.

    What’s interesting is that while non-retirees are worried about their retirement prospects, those who are already retired are not.

    Gallup found that 77% of retirees say they currently have enough money to live comfortably, a figure that’s unchanged from last year despite the rising cost of living. Gallup said retirees have always had quite high views on living comfortably (ranging between 71% and 83%) — higher than those who await retirement.

    Questions about the financial health and future of Social Security could be part of the reason for that divide.

    Gallup found that while 59% of retired adults say Social Security is a major source of their retirement income, just 34% of retirees expect it will be for them. Those awaiting retirement expect to be forced to rely more on 401(k), IRA and other retirement savings accounts.

    Americans give the economy poor marks

    The Gallup findings on retirement are just the latest that point to the gloomy mood among consumers as they grapple with inflation, high borrowing costs and recession warnings.

    Consumer sentiment remains historically low, dropping to a six-month low in May, according to the University of Michigan.

    A CNN poll released Tuesday found that 76% of adults describe the economy as in poor shape, up from 71% who felt that way in March.

    A Gallup poll released earlier this month found that just 35% of adults have a “great deal” or “fair amount” of confidence in President Joe Biden to do or recommend the right thing for the economy. That nearly matches the low confidence rating for presidents — 34% for former President George W. Bush in 2008.

     

    Piggy Bank with the words "Reverse Mortgage" printed on its side

    Why a Federal Retiree Might Consider a Reverse Mortgage

    Reverse mortgages could help fund LTC care for federal retirees, according to a financial planner

    July 17, 2023, 3:20 pm By Chris Clow

    Reverse mortgages could present a viable option for federal retirees to fund their long-term care (LTC)…according to Edward Zurndorfer, a certified financial planner, in a column published by My Federal Retirement.

    “Many federal employees and retirees bought their current homes years ago and have accumulated equity in their homes,” Zurndorfer said in his column. “They can tap into that accumulated home equity while they continue to live in their homes to pay current and future expenses including the cost of LTC.”

    While most seniors tend to use a reverse mortgage to supplement their cash flow in retirement, federal retirees may have unique interests or needs that might make a reverse mortgage an appealing option, he explained.

    “A federal annuitant who is receiving a CSRS or FERS annuity, Thrift Saving Plan (TSP) and Social Security retirement benefits, may need to make some major improvements to their home,” he said. “They may qualify to get a lump-sum amount of money from a reverse mortgage in order to finance these improvements.”

    In the realm of LTC, a person who wishes to remain in their own home or to fund the care of a spouse may also see potential in a reverse mortgage’s product features.

    “Provided that the other spouse remains living in the home, a reverse mortgage could be used to pay for the annuitant’s or spouse’s stay in the assisted living or nursing home facility,” he said. “If the homeowner is an LTC insurance policyholder, then monthly payments via the reverse mortgage can be used to help pay the LTC insurance premiums.”

    If you would like more information about Reverse Mortgage options, we recommend you speak with a qualified advisor.