collage of money, charts, student working and graduating

America Saves Week

“America Saves Week is an effort aimed at reaching more institutions and individuals to increase awareness that people need to save money, reduce debt and build wealth. The primary focus of America Saves Week is to encourage Financial Action – commitments to save, invest and build wealth” …

Launched in 2001 and managed by the Consumer Federation of America, America Saves was initiated to focus greater attention on the need and opportunities for personal savings. To date, more than 67,000 Americans have enrolled as Savers by committing to implement a detailed plan to achieve a specific savings goal. This week (February 25 to March 4) has been set aside as the first America Saves Week. Several items included in accompanying press releases have stuck out to me as worthy of mention …

A recent Federal Reserve Board study identified successful saving strategies:

  • Have a reason to save. Households with an identifiable goal for saving were more likely to have financial assets [and also have higher levels of assets]. Setting a goal is an important part of any saving strategy.
  • Think ahead, plan ahead. Looking into the future can be an important motivational tool to help people anticipate and be prepared for future expenses. The most prominent goal of the Savers in the program is to develop an emergency fund.
  • Develop a savings habit. It is no secret that getting started is the biggest challenge people face financially. Once the habit is developed, people comment on how ‘second nature’ saving becomes.
  • Make savings automatic. Automatic savings via payroll deductions or automatic transfers from a checking or savings account is one strategy found to be very effective in “creating” Savers.

Two great ways to establish automatic savings:

(1) Online Savings Accounts – provide high yields; the following all currently pay 5% + with no minimums to establish [or maintain] an account, no fees, and are FDIC insured.

  1. Emigrant Direct
  2. FNBO Direct
  3. HSBC Direct

(2) Mutual Funds – while many mutual fund companies require a large initial investment to open a mutual fund account, some companies will waive the initial investment if you establish an automatic investment (typically $50/month). T.Rowe Price and TIAA-CREF are a couple of notable ‘no load’ fund companies; AIM Funds and American Funds are examples of load fund companies that allow for automatic investments to open accounts. The Mutual Fund Investor Center provides a search tool to find companies that accommodate people looking for automatic investment opportunities.

Accompanying the America Saves Week is the announcement by eXtension of its new personal finance interactive website.

Related Sites and Resources.