Now, during America Saves Week, Colorado Treasurer Dave Young encourages Coloradans to save for the unexpected.
“How often have you heard that saving for life’s unexpected events is an important and necessary part of being financially prepared?” asked Dave Young, Colorado State Treasurer. “And that you need three to six months of expenses in your emergency savings account?
For those of us who struggle with saving for the unexpected or don’t have that three to six months of expenses saved, our confidence might be shaken because we haven’t met this standard. And when we lack confidence, it can be even harder to get or stay motivated to save for those unexpected events that arise.”
“Whether it’s needing a car repaired or an opportunity to snag Taylor Swift tickets, having short-term savings allows you to take care of those unexpected expenses without dipping into funds you need in the future for retirement,” shared Hunter Railey, Colorado SecureSavings Program Director.
Instead of focusing on what you haven’t accomplished, here are a few strategies to consider that may help you build your financial confidence and begin or continue on your path to saving for the unexpected.
1. Set a goal of saving $500 for emergencies and once you reach this amount, set a new goal for another $500 and keep going. Reaching several smaller goals feels good and when we feel good, we’re more likely to remain committed to our plan.
2. If you’re not sure exactly how much you can realistically save each month, try using the America Saves Spending and Saving Tool to get a clear view of your finances. Once you know exactly what your income and expenses are you will be able to set a realistic timeframe for saving that first $500 or beyond.
3. Consistency can help build confidence. Saving automatically every time you get paid is the easiest way to be a consistent saver and build confidence. When you are saving $10, $20, or $50 every paycheck you will see regular progress, building your confidence along the way.
4. Instead of only focusing on the negative reasons for having an emergency savings account, think of it as saving for opportunities. Framing the reason you are saving in a more positive light may help you feel better about setting money aside. Not only are you saving to pay for car repairs, home expenses, or medical bills, tell yourself you are saving for an unplanned dinner out to celebrate a friend’s birthday or the chance to go see your favorite artist in concert. Those positive feelings can be motivating.
5. Use the three to six months of expenses in a savings account as a guideline. Try not to become discouraged if you haven’t met this level. Instead, focus on what makes the most sense for you at this time, knowing that as your income grows or expenses decrease, your ability to save more quickly will change.
About America Saves Week
Since 2007, America Saves Week has been an annual call-to-action for everyday Americans to commit to saving successfully. Through the support of thousands of participating organizations, together we encourage our local communities to do a ‘gut-check’ on their finances and saving behaviors. The America Saves pledge is the framework that allows savers to set a goal, and make a plan to achieve better financial stability.