This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stop Being Allergic to Saving

NEW YORK (TheStreet) -- Are you saving enough money?

This week is America Saves Week, and since it is also tax season, this is the perfect time for anyone to assess their savings plan and consider their financial goals.

At this point, some readers will have a cynical reaction, pointing out that on a macro basis, incomes for the middle class are declining when compared to earnings for the upper crust, the middle class is shrinking, homes are becoming unaffordable, etc.

But if you get caught up in all the bad news, you skirt the question and it's a very important question for you to answer, for yourself.

Must Read: Don't Read Into Barnes & Noble's New Deal

Not everyone is suffering from economic problems in the same way, and many people at all income levels can save more money if they carefully consider their long-term goals and their monthly expenses.

The little things add up. Do you go out to lunch every day? If so, try recording this spending for one week and then for a month. Doing this may be enough to encourage you to begin bringing lunch from home, which not only saves oodles of money, it can improve your health.

Here at TheStreet, a major focus is helping readers find investment vehicles to consider, however, chances are that you are not saving as much as you could, and you may be focusing much more on picking stocks than you are on figuring out how to adjust your own budget in order to grow your savings.

Maybe you're already maximizing your savings. But you surely know someone who is not. Maybe you can spread the word. At americasavesweek.org, there's a very simple and useful section called "Assess Your Savings Knowledge." All the tool does is ask key questions; most apply to people of all income levels. Here are a few:

Do you have at least $500 of emergency savings to pay for unexpected expenses? This question ties into a problem affecting many people, who fall into various short-term financial traps, including relying on payday loans repeatedly. Once the cycle starts, it's very difficult to stop.

Again, you may roll your eyes at this point and point out that so many people are struggling. Indeed they are. But some people may be making monthly or daily expenditures that keep them from building up any savings at all.

Do you save a portion of tax refunds, gifts, bonuses, or other financial windfalls? That tax refund could quickly be spent on buying something new, but do you really need whatever you are considering buying? The chunk of cash coming in could jumpstart your savings, or could be used to pay down debt. If you use it to pay down debt, consider this -- will you have to do this again next year? Why? Is there any way you can make changes now so that your next tax refund or other windfall can be saved?

Do you save enough for retirement? Of course, very few people do, but one thing everyone needs to consider is that Social Security is meant to supplement retirement income. It is very difficult for most people to live off of Social Security.

Do you save for retirement at work? Many larger employers offer 401k or 403b retirement plans, with the employer matching the employees' contribution up to a similar limit. If your employer offers this type of plan, you might think there's no way you can afford to participate.

A 401k or 403b plan is a tax deferred retirement plan. This means any money you put into your retirement account now will not be taxed. The contribution will be deducted from your taxable income. Later in life when you begin withdrawing from the retirement account, you will pay taxes on what you withdraw, possibly at a lower tax rate than you are paying now.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
NFLX $106.42 -2.70%
AAPL $122.77 0.00%
FB $94.20 -2.80%
GOOG $627.26 0.00%
TSLA $253.39 -4.50%

Markets

Chart of I:DJI
DOW 17,568.53 -127.94 -0.73%
S&P 500 2,079.65 -12.01 -0.58%
NASDAQ 5,088.63 -48.8540 -0.96%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs