We all want to save money, but it’s not always easy to figure out where or how we should be saving money.
Last week, America Saves, along with the Department of Labor, held a webinar for those new to the work force. The webinar stressed that the best way to save for first time earners is through your employer. But whether you are new to the work force or not, you may be missing a valuable, easy, and automatic way to save.
Did you know?
- Over one-third of all eligible employees do not participate -at all- in their company’s retirement savings plan.
- More than 90% of those who do participate fail to take full advantage of the legal maximum contribution limits.
Participate in a Work Retirement Plan
Many workplaces offer retirement plans to employees. This is a simple way to save because money automatically gets transferred to your retirement account before you get paid. Decide how much you want to contribute each month and your work is done.
Check to see if your employer matches the money you contribute. If so, make sure to put in the maximum amount so you get the full match from your employer. That match instantly doubles your contribution! Another great benefit is that many times money you put in your retirement account isn’t taxed – saving you even more.
If your employer doesn’t offer a retirement program, don’t worry, you can still save for retirement by putting money in an Individual Retirement Account (IRA).
Save Through Direct Deposit
If your work has a direct deposit program, divide your paycheck into different accounts and send part of it straight to a savings account. Again, once you figure out how much money you want to save each month the rest is taken care for you. No more waiting until the end of the month to see how much money you have left to put towards savings.
You’re saving the best way possible by saving automatically and paying yourself first.
Start as Early as Possible
It’s best to start putting money into your retirement as soon as you can. Even if you feel like you’re behind, it’s better to save today than to wait until later. The sooner you start to save, the longer your money has to work for you.
You can save effectively if you start now, save automatically and regularly, and don’t dip into your savings.
Katie Bryan is the communication manager at America Saves, a national campaign involving more than 1,000 non-profit, government, and corporate groups that encourages individuals and families to save money and build personal wealth. Follow America Saves on Twitter and Facebook.