Most of the world thinks of Americans as the consummate consumers. We have a reputation for impulse buying, shopping sprees, and lack of financial self-control. However, this perception is not really accurate. At least not since 2020, the year of mass disruption and upheaval. During this time, US personal savings soared as high as 33.7%. During the same period in 2019, personal savings only stood at 7% of disposable personal income. What this tells us is that Americans are saving more than ever before. Many choose, for now, to mostly spend on essentials like Spectrum mobile plans. But are they saving the right way?
Making the Most of Your Savings Account
Saving more personal income may be the healthiest financial habit on a grassroots scale Americans have discovered in a long time. Surviving in a country as developed as the United States is never easy. The higher standards of living and access to world-class education and healthcare do not come cheap. Frugal living seems to have been a long time coming. But if your savings account is meant to be a cushion, you can’t rely on saving a bit of every paycheck. With a little strategy, you should be able to increase your cash savings significantly.
Having a specific goal always helps give direction to your savings. You’ll have to use them at some point, but why keep the question of “on what?” open? Definite saving goals will motivate you to keep saving and serve as a milestone that you can progress towards. Here are a few common saving goals among the majority of the American population to make the most of your savings account:
A Travel Fund
Travel seems like a distant dream since the COVID-19 pandemic. But that will hopefully not be permanent. As they say, travel is food for the soul, and most of us are starving for it. Pick a travel destination or destinations you’ve always wanted to visit. Do your research on things like exchange rates, living expenses, food, and board, etc. Once you have a ballpark figure, start saving towards it. The satisfaction of inching closer to your vacation goals is almost as good as the vacation itself.
Prepping for Future Childcare and Emergencies
Childcare is not easy or cheap. Especially if you have small kids or even babies on the way. If you want to offer them a fair and enjoyable childhood, start saving today. Think of all the expenses you’d have to pay in order to give your kids a decent life. Things like summer camps, sports teams, dental expenses, and even family vacations are significant expenditures. Again, you’ll need to research possible expenditures that may arise to arrive at a ballpark figure. This will serve as your saving goal for quite a few years, so be prepared.
Of course, the world we live in is a very uncertain place. Anything could go wrong, and before you know it, you could be drowning in medical bills or foreclosures or lost employment. These are the rainy days you need to be saving for in any case. Your savings account should have enough for you to survive, even if getting back up on your feet financially may take longer.
Upgrading to a New Car
Everyone loves a shiny new ride. And wanting to get one shouldn’t just be an idle dream. Whether you want to buy a quiet suburban vehicle or a noisy JDM machine, just start saving towards it. Identify the vehicle you want to buy and figure out how much you need for a down payment. But don’t forget about the lease payments. Make sure you have enough money saved up to at least serve as a cushion to not miss payments, even if you’re paying comfortably from other income sources.
Becoming a Homeowner
At some point, every apartment becomes too small for a growing family. You have probably mused about moving to a nice cozy home out in the suburbs, maybe even with a backyard for the kids to play in. This doesn’t have to remain an idle musing when it can easily be a goal you can work towards. Speak to mortgage agents, credit companies, and financial advisers to get an idea of how much you’ll need to make a downpayment on your new home. Then factor in the utilities you’ll need to pay for, such as Spectrum mobile, heat, electricity, and water. You may also have to account for major renovations or remodeling. But with a comfortable savings cushion, you’ll be more confident about becoming a homeowner.