SAFE Credit Union is here to help you take control of your finances and build a strong foundation for your future. Financial Capability Month highlights the importance of managing your money to help you handle life’s surprises, reach your goals, and create lasting financial security. SAFE and our certified financial experts offer resources on practical strategies to help you save with confidence, set smart goals, automate savings, and tackle debt.
Let’s get started on building a savings plan that works for you!
Save Automatically
You can easily set up automatic transfers from your SAFE checking account to your SAFE savings account in Online Banking and in the SAFE Mobile App. Start with transferring a small amount once or twice a month, say $25 or $50. Increase it whenever you get a raise or additional income.
Divide your direct deposited checks into two accounts. Send the bulk of your direct deposit into your spending account and the rest into a savings account.
Take advantage of SAFE’s Perfect Cents Checking®. Save with every purchase! Perfect Cents Checking® rounds up the amount of every purchase you make with your SAFE debit card to the next whole dollar. The “change” is deposited at the end of the day into your SAFE savings account.
Saving for the Unexpected
One thing we learned from the growing cost of goods and services was to prepare for the unexpected. Having an emergency fund helps cover those unexpected expenses, such as car or home repairs, reduced income, or job loss. While financial experts advise having enough money set aside to cover three to six months of your expenses, that might be difficult to put together right away.
Emergency funds may sound overwhelming, but they can easily start with a small goal. Smaller goals will be easier to reach. Your success will provide incentives for you to keep going. Start with a six-month savings goal of $200 to $300. Once you’ve saved that emergency fund, increase your savings goal for the next six months.
Develop a plan. Create a plan to ensure you are focused on meeting your goal. Part of your plan may be to set up automatic savings, cut expenses, or find ways to increase your income.
Once you reach your initial goal, don’t stop! Continue building on your success and you may reach that three to six months of expenses saved up financial experts recommend.
Saving Today for a Secure Tomorrow
It’s never too early – or too late – to start saving for your retirement. Get the most out of compound interest and dividends by starting to save early in your career. If you start later, take advantage of increased limits on how much you can put into retirement accounts after age 50.
Use your employer’s 401(k) plan. Try to save at least 10% of your pay. Consider increasing your contribution with each raise you receive. And make sure to take advantage of any employer match.
Consider a Roth IRA. You can contribute up to $6,000 (or up to $7,000 in you’re 50 or older) and you won’t be taxed when you withdraw the funds in retirement. You can set up a direct deposit to your Roth IRA. If you put in $500 a month, you can max out your contributions for the year. Learn more about individual retirement accounts at SAFE.
Save with Intention: Give your money a purpose
Saving isn’t just about putting money aside – it is about giving your money a purpose. When you save with intention, you stay motivated to maintain good financial habits even when unexpected expenses come your way.
Setting SMART goals
A SMART goal is specific, measurable, achievable, realistic, and timely. A clear goal gives your savings a direction and helps you track your progress. It also allows you to assess whether you need to adjust based on your current budget. We all have financial aspirations, but when we compare our income to our expenses, we need to ensure our goals remain realistic and motivating – no matter what life throws our way.
Setting a Deadline for Your Goal
Just like work deadlines, school assignments, or unavoidable bill due dates, setting a deadline for your financial goals can keep you on track. After all, if we’re used to meeting deadlines for responsibilities, why not set one for something that benefits our future?
Your deadline will depend on the type of goal you are working toward:
- Short-term goals: Achievable within a year, such as building a small emergency fund or saving for a holiday.
- Mid-term goals: Typically take one to five years to complete, like paying off a car loan or saving for a security deposit on a rental property.
- Long-term goals: Require five or more years, such as saving for retirement or paying off your mortgage.
No matter what you are saving for – an emergency fund, a dream vacation, or a major purchase – be intentional. Define your goal, set a timeline, and commit to making it happen. Your future self will thank you!
**Resource: Be sure to check out our Financial Tool Kit https://www.safecu.org/community/financial-education#finlit-toolkit-resources
Paying Down Debt is Saving
By paying down debt, you’re saving! Interest on debt can reduce how much money you have available to save. Here are some tips on reducing your debt load.
- Stop creating new debt. Take a break from using your credit cards for a certain period — such as a month.
- Increase your monthly payments. That way you reduce the time it will take to pay off your debt—and you pay less interest in the process.
- Reduce your fixed costs. Interest rates fluctuate, so when interest rates drop, consider refinancing your mortgage or car loan so you’ll have lower monthly payments. Find SAFE’s latest loan rates here.
- Reduce expenses. Make your own meals rather than ordering out. Find ways to reduce other expenses, including trimming entertainment subscription services, contacting your insurance companies to see about lowering rates, and shopping your closet rather than buying new clothes. Apply savings to paying off your debt.
