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February 24, 2010

NNEDV is proud to support America Saves Week, February 21-28, 2010.

Tips & Highlights:

  • Savings do add up!  NNEDV's Saving & Interest Exercise shows how little it takes to start your savings plan today.
  • Test your savings knowledge.  Take the Savings Quiz to reveal how much you understand about the realities of saving in America.
  • What do you know about compouding?  Learn how compounding can work for you and about other saving strategies by accessing the Moving Ahead Through Financial Management curriculum (Module Five).  The following is a short excerpt from the curriculum:
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How Compounding Works for You:

  • Start early.  The younger you start, the more compounding can work in your favor and the wealthier you can become.  If you didn't start early don't despair - there is still time.  Put away as much as you possibly can.  Federal regulations allow older workers to put more money into retirement plans to "catch up."
  • Make regular investments.  Remain disciplined and make saving for retirement a priority.  Do whatever it take to maximize your contributions.  If you work for a company that provides a match, make sure that you enroll and are eligible for the highest match from the company.
  • Be patient.  Do not touch the money.  Compounding only works if you allow your investment to grow.  The results will seem slow at first, but persevere.  Most of the magic of compounding comes at the very end.

 

More Tips & Highlights:

  • Use the America Saves saving guide to assess the current state of your savings.  As you are developing your plan to save, use these tips to help you cut costs on food, clothing, home heating and other expenses.
  • Check out the National Endowment for Financial Education's (NEFE) tips on creating a spending plan.  By drawing a spending map, you won't get lost.  In four short steps, identify income, list expenses, compare income and expenses, and set priorities and make changes.  You can make sure your day-to-day expenses do not distract you from your long-term spending goal.
  • Treat yourself and your family without breaking the bank.  The following are some inexpensive ideas for treating yourself and your children.

Treating Yourself:

  • Give yourself a manicure
  • Enjoy your favorite dessert
  • Read a good book
  • Spend time with a good friend
  • Go for a walk

Treating Your Children:

  • Bake them a cake
  • Read them a story
  • Rent a video or borrow one from the library
  • Play their favorite game with them
  • Invite their friends for a sleepover

 

Retirement & Investing

  • Identify approximately how much you need to save to fund a comfortable retirement.  The Ballpark E$timate is an easy-to-use, two-page worksheet that helps you quickly identify approximately how much you need to save to fund a comfortable retirement. The Ballpark E$timate takes complicated issues like projected Social Security benefits and earnings assumptions on savings, and turns them into language and mathematics that are easy to understand.
  • Check out FINRA's 401(k) investing advice.  Smart 401(k) Investing tips is full of advice on how to open a 401(k), different plan options, strategies on proper investing, as well as rules on how to manage, move, and withdraw funds from your account.  Confused about the terminology?  Visit the 401(k) glossary for help.  Take charge of your 401(k) and become an expert!
  • Access the Moving Ahead Through Financial Management curriculum (Module Five).  Learn how to calculate your retirement needs and to learn about different investment options.  The following are two short excerpts from the curriculum:

 

Calculate Your Retirement Needs and Consider These Questions:

  • How long will your retirement last?  When do you plan to stop working? Will you retire early or are you planning to work at least part-time as long as you can? How long are you likely to live?  The Social Security Administration estimates that a 65-year-old woman can expect to live another 17.5 years.
  • How much will the dollar be worth?  During times of inflation or rising prices, you’ll need more income to support your current lifestyle. When calculating how much money you’ll need for retirement, assume inflation rates of three to four percent.
  • How much will you spend?  What type of retirement do you envision? Do you plan to stay in your current home? Do you plan to retire to a beach community in Florida?  The first lifestyle will probably cost less than the second.

 

Different Investment Options:

  • Savings Bonds: Savings bonds are issued by the government, in face value denominations from $50 to $10,000. Interest on the bonds accumulates tax-free. When you buy a savings bond, you usually pay half its value, and when it matures the bond is worth twice as much as you paid. For example, if you pay $50 for a $100 savings bond, it will be worth at least $100 upon maturity.
  • Mutual Funds: Mutual funds are a collection of stocks from different companies that are combined (or co-mingled) to provide a single investment. For example, a mutual fund might invest 10 percent in bank stocks, 25 percent in retail outlet stocks, 25 percent in medical technology stocks, 25 percent in high-tech stocks and the remaining 15 percent in government securities. Mutual funds accept money from many investors and often charge a fee to manage the "mix" of stocks.
  • Stock Investments: Stock investments make you a shareholder of a public company and indirectly allocate your money to be used in the company’s business. In return for your investment, you are entitled to a share of the company’s profits. Earnings are paid back as dividends or retained to help the company grow. If the company isn’t profitable, you may experience losses.

For more resources and information about America Saves Week, please visit the America Saves Week website.