Savings Is Good For You!

I’m Frank Money, and I wanna help you investigate everything about money! For example, let’s investigate savings. It doesn’t take much detective work to understand that savings is good for you!

And here’s the good news for millennials – you are saving at a rate greater than any generation before you. Fidelity Investments found that 20 somethings are saving on average 7.5% of their income compared to 5.8% in 2013.

We’ve talked about retirement savings, and how important it is to start as soon as you can, along with the benefits of deferring taxes and saving on how much income tax you pay when you invest in a 401k, IRA, etc.

But what about non-retirement savings?

One strategy to employ is to set a goal of savings out of each pay check, and to make that ‘payment’ to you savings account, just like you pay your rent, phone and electric bill. Over time, you grow your savings account and let your money work for you.

What’s the amount you should save? well, it varies from person to person, but a good rule of thumb is to save 10-15% of your gross income (the amount you make BEFORE taxes are deducted) and use that for both your retirement accounts as well as non-retirement accounts.

It takes discipline, but getting used to a regular savings plan is something all millennials need to consider. It doesn’t take much detective work to understand  – SAVINGS IS GOOD FOR YOU!

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Employee Sponsored
Savings Plans

You’re young and just starting out in the workforce and lucky enough to be able to join in an employee sponsored savings plan – but you’re not sure if you should.  After spending years investigating what you should do, this detective’s answer? Yes, definitely, do not hesitate – don’t be a Schmo. I hope that’s clear enough. To understand it better let’s take a look at the definition.

A pooled investment account provided by an employer that allows employees to set aside a portion of their pretax wages for retirement savings or other long-term goals (i.e. paying for college tuition, purchasing a home). Many employers match their employees’ contributions up to a certain dollar amount, or by a certain percentage.

If your employer matches all or part of your contribution, that’s like found money! Which is Frank Money’s favorite kind of money! Keep in mind that there may be plans that require employees to remain employed for a minimum amount of time before they are vested and eligible to withdraw employer-matched funds. ESPs can be an attractive and relatively easy way for employees to lower their taxes and save for long-term goals.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Invest For Retirement

I’m Frank Money, and I’ve got a question for you. What’s the most expensive purchase you’ll make in your life? A car? Nope. A house? You might think so but you would be wrong. Actually, it’s your retirement. Bet you didn’t even think about that answer.

Here’s the scoop on the case for retirement. Retirement is a long way off. Not even in the horizon – but over the horizon and miles away, and life has more curves than a scenic railroad. Well, there’s some good and there’s some bad with that kind of thinking. Since you do have 30 to 40 years before retirement, investing starting right now will pay off in huge financial dividends down the road.

But you have to do your research with investing, matching 401k’s, having a set amount from your paycheck automatically deposited into your savings and so much more. Matching money from your paycheck from your employer is actually free money – and free money is this gumshoe’s favorite kind of money! As for considering retirement to not even be on the horizon, unless you’re planning to be flipping burgers at 65, this detective strongly suggests you start looking beyond the horizon.

April is National Financial Literacy Month, Detective Frank Money’s favorite month! To celebrate the importance of being financially literate, Detective Money is going to post financial literacy tips every day.

Savings Is
Good For You!

2016_0426-FrankMoneySavingsGood

Let’s investigate savings. It doesn’t take much detective work to understand that savings is good for you!

And here’s the good news for millennials – you are saving at a rate greater than any generation before you. Fidelity Investments found that 20 somethings are saving on average 7.5% of their income compared to 5.8% in 2013.

We’ve talked about retirement savings, and how important it is to start as soon as you can, along with the benefits of deferring taxes and saving on how much income tax you pay when you invest in a 401k, IRA, etc.

But what about non-retirement savings?

One strategy to employ is to set a goal of savings out of each pay check, and to make that ‘payment’ to you savings account, just like you pay your rent, phone and electric bill. Over time, you grow your savings account and let your money work for you.

What’s the amount you should save? well, it varies from person to person, but a good rule of thumb is to save 10-15% of your gross income (the amount you make BEFORE taxes are deducted) and use that for both your retirement accounts as well as non-retirement accounts.

It takes discipline, but getting used to a regular savings plan is something all millennials need to consider. It doesn’t take much detective work to understand  – SAVINGS IS GOOD FOR YOU!

April is National Financial Literacy Month, Talkin’ Money’s favorite month! To celebrate the importance of being financially literate, we’re going to post financial literacy tips every day.

Get wealthy with regular investments, time, and compounding

2016_0416-CompoundedInterestWe’ve all heard and read a thousand times how we should save on a regular basis and the younger you start the more we’ll have when getting closer to retirement. But as sure as the sun rises there will always be something that happens in your life that will make it difficult for you to part with your money to put into savings. That’s why every paycheck you should have a set portion of your salary automatically deposited into your savings account.

The later you wait to start saving, even a year or two, could mean the difference of up to $200,000 or more! Remember compounding interest? Over time your money will make more money for you.

In fact, if you want to have what we financial literacy fans call ‘fun’ here’s a link to the government’s Securities and Exchange Commission’s handy, dandy Compounded Interest Calculator. GO ahead, plug some numbers in and step back, ready to be surprised!

https://www.investor.gov/tools/calculators/compound-interest-calculator

Good old Benjamin Franklin once said: “An investment in knowledge pays the best interest.” So it’s up to you to be a wise investor with your savings.

Say YES to Employee Sponsored Savings Plans

2016_0412-EmplSponsSavPlansWhen you’re young and just starting out in the workforce and lucky enough to be able to join in an employee sponsored savings plan but you’re not sure if you should. Here’s the answer: Yes, definitely, do not hesitate. I hope that’s clear enough. To understand it better let’s take a look at the definition.

A pooled investment account provided by an employer that allows employees to set aside a portion of their pretax wages for retirement savings or other long-term goals (i.e. paying for college tuition, purchasing a home). Many employers match their employees’ contributions up to a certain dollar amount, or by a certain percentage.

If your employer matches all or part of your contribution, that’s like found money! Keep in mind that there may be plans that require employees to remain employed for a minimum amount of time before they are vested and eligible to withdraw employer-matched funds. ESPs can be an attractive and relatively easy way for employees to lower their taxes and save for long-term goals.

April is National Financial Literacy Month, Talkin’ Money’s favorite month! To celebrate the importance of being financially literate, we’re going to post financial literacy tips every day.