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Now is the Perfect Time for a Savings Checkup

America Saves Week – February 26 through March 3 – is a prime catalyst for taking stock of why it’s critical to save


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Any time is a good time for individuals and business owners to consider how they can save more effectively. But the annual America Saves Week beginning February 26 through March 3, offers a timely opportunity for a savings and financial checkup.

Conducting a financial audit now can help jump-start your 2018 savings success. The Federal Reserve reports that more than half of U.S. households have less than one month’s worth of income in a savings account – much less a six-month emergency fund recommended. In a Pitney Bowes Software survey, Coloradans ranked 45th in average savings balance a few years ago and it’s time to make improvements. Clearly, a national pandemic exists relative to savings habits – it’s time to make a change.

Since 2007, America Saves Week – a campaign managed by the Consumer Federation of America – has provided strategies for motivating financial action. Consumers and business owners can consider a number of steps to reflect on their finances, pinpoint quick savings, meet savings and debt-reduction goals, develop a plan for 2018 and beyond.

Here are some ideas to promote a more effective savings plan. Adopting just one idea could have a dramatically positive impact on your financial success.

  • SAVE AUTOMATICALLY 

Have your bank or credit union transfer a fixed amount, say $100 biweekly, to a savings or investment account from your checking account. If possible, have your employer set up automatic transfers from your paycheck to your savings account. Establish automatic payments to a lender to pay down debt, which may trigger a small interest-rate deduction for some types of loans, such as student loans. Consider rounding up each of your debt payments to the nearest $100 or $1,000 as well. Save at least the minimum contribution into a retirement account, maximizing any match offered by your employer.

  • SAVE FOR RAINY DAYS

A rainy-day fund is for unplanned expenses, such as medical bills or repairs. Typically, such a fund carries $1,000 to 5,000. This differs from the three to six months of average monthly expenses needed to safeguard against a temporary absence of work. Easy ways to find this extra money could include reducing credit card use and periodically reviewing bills to find cutbacks. Bank any extra income, including raises and tax refunds. These rainy-day funds belong in a place with easy access and little risk, such as a money market fund or a savings account. Don’t be concerned about return on this money – easy access is most important.

  • SAVE FOR RETIREMENT

First, speak to your planner or use an online tool to determine how much savings is needed to fulfill your retirement goal. With that target in mind, set up automatic contributions into your employer’s 401K or another qualified retirement account. Follow this link to check your current Social Security retirement benefits and selection options. Consider a Roth IRA or Roth 401K, if offered by your employer, to minimize tax burden in retirement. Finally, if over 50, utilize higher contribution limits on your IRA or 401K.

  • SAVE FOR THE MIDDLE TERM

In addition to saving for a rainy day (short term) and saving for retirement (long term), it’s important to consider all of those years in between. This is an area of saving that often gets overlooked but is crucial for financial security. For example, where will the money come from to fund college for your future children? What about that mountain house you’ve dreamed of? Plan on buying a sailboat in 10 years? Rather than letting money sit in a low yielding savings account for a decade, but unable to withdraw money from your IRA before your retirement, you need an account accessible for those middle-term goals. This is where securities, real estate or other investable assets could be utilized. Ask your planner, or research on your own, how to save efficiently for those periods of your life.

America Saves Week is a prime catalyst for taking stock of why it’s critical to save – and for building or bolstering a savings plan and fund.


Royce Zimmerman, CPA, CFP®, CLU®, ChFC®, Wealth Management Advisor.

Royce Zimmerman and Associates of Northwestern Mutual. Zimmerman graduated from Business School at the University of Wisconsin – Madison with honors in 2001 with a degree in Accounting.  He earned a Masters of Accountancy in 2002 from Madison and earned his CPA license before moving to Chicago.  For two and a half years, he served as a tax advisor for high net worth individuals in Chicago.

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Royce Zimmerman

About Royce Zimmerman

Royce Zimmerman, CPA, CFP, CLU, ChFC, is a wealth management advisor at Royce Zimmerman & Associates of Northwestern Mutual. He graduated from the Business School at the University of Wisconsin – Madison with honors in 2001 with a degree in Accounting. He earned a Masters of Accountancy in 2002 from Madison and earned his CPA license. Royce can be reached at 303-512-2170 or royce.zimmerman@nm.com

Disclosure: This publication is not intended as legal or tax advice. Northwestern Mutual Advisors do not give legal or tax advice. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.

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