Why Your Financial Security Depends on Savings and How to Build It In Today's Tough Economy

In today's tough economy, many of us are feeling the pinch. A recent CNN poll shows that nearly four in ten U.S. adults worry that their family's income won't be enough to cover expenses. This concern has grown a lot and is now as high as it was during the Great Recession. Back then, we saw a significant number of families struggling to make ends meet, and unfortunately, we're seeing similar levels of worry and financial stress today. It's another reminder of just how challenging these times are for many people, including our members.

Let's look at some more numbers to better understand the situation. Everyday expenses are taking a toll on many households. Over two-thirds of Americans are stressed about everyday costs. The Bureau of Labor Statistics found that in 2022, the average household spent nearly $73,000 on basic needs like housing, childcare, and utilities. Groceries, phone bills, utilities, gas, and rent or mortgage payments are the top regular expenses, with grocery bills being the most frustrating.

It's no surprise that these constant expenses are making it tough to save money. Younger generations are especially hit hard by housing costs, while older generations struggle more with grocery bills. Over half of all people surveyed reported feeling overwhelmed just trying to manage their finances.

With all these challenges our members are facing, we know that saving money has become more important than ever. And that's why we're dedicated to providing the tools, resources, and support you need to build a strong financial future.

The Importance of Savings

Saving money isn't just a good habit; it's a must in today's unpredictable economy. Many of us worry about whether our income will cover all our expenses. With the rising costs of groceries, utilities, and housing, it's more important than ever to have some savings set aside.

Here are some tips to help you start saving:

Create a Budget: Understanding where your money goes is the first step to saving. List your income and all your expenses to see where you can cut back. Apps like Mint or YNAB (You Need A Budget) can help simplify this process. A budget gives you a clear picture of your financial situation and helps you identify areas where you might be overspending. As personal finance expert Dave Ramsey says, "A budget is telling your money where to go instead of wondering where it went."

Pay Yourself First: One of the best ways to make sure you're always saving is to pay yourself first. This means setting aside a chunk of your income right when you get paid, before paying bills or buying anything else. Think of this amount as a bill you can't skip. Even saving small amounts can add up over time and really boost your financial security. Warren Buffett put it simply: "Do not save what is left after spending, but spend what is left after saving." By focusing on saving first, you make sure your future needs are covered before you take care of your current wants. This method helps you build a strong financial base and gives you peace of mind, knowing you have a safety net for unexpected costs or future goals.

Automate Your Savings: Set up automatic transfers from your checking account to your savings account. This way, you won't be tempted to spend the money. Many banks and credit unions, including Nuvision, offer this feature. Automating your savings takes the effort out of the process and ensures you're consistently setting money aside. David Bach, author of "The Automatic Millionaire," states, "The key to building wealth is to make it automatic." By automating your savings, you create a habit of saving without even thinking about it, making it easier to reach your financial goals.

Cut Unnecessary Expenses: Take a look at your monthly subscriptions and memberships. Cancel the ones you don't use regularly. Think about dining out less and cooking more at home. These small changes can add up and make a big difference in your budget. Financial advisor Suze Orman suggests, "Look at every expense and ask yourself, 'Is this a want or a need?' You'll be surprised how much you can save by eliminating unnecessary spending." By cutting out these extra costs, you can free up more money to put towards your savings and other important financial goals.

Build an Emergency Fund: Aim to save three to six months' worth of living expenses. This fund can help cover unexpected costs like medical bills or car repairs without derailing your financial progress. Personal finance expert Dave Ramsey advises, "An emergency fund is a rainy-day fund for life's unexpected events. It's not a matter of if these emergencies will happen, but when they will happen." Having an emergency fund gives you a cushion to handle life's surprises, keeping your financial plans on track and reducing stress during tough times.

Use Cash-Back and Rewards Programs: Take advantage of cash-back credit cards and loyalty programs. They can save you money on purchases you already make. Just be sure to pay off the balance each month to avoid interest charges. Nuvision's Visa Rewards Card is a great option for this. It offers competitive rewards on everyday purchases, making it easy to earn points for things like travel, gift cards, or even cash back. By using a card like this responsibly, you can get more value out of your spending. Financial expert Clark Howard states, "Using cash-back and rewards credit cards wisely can essentially provide a discount on everything you buy." So, take advantage of these programs to maximize your savings while keeping your budget in check.

Save on Utilities: Simple changes can help lower your utility bills. Turn off lights when you're not using them, switch to energy-efficient appliances, and reduce your water usage. These small adjustments can add up to significant savings over time. The U.S. Department of Energy suggests, "By taking steps to reduce energy use, you can save an average of 25% on your utility bills." By making these easy changes, you can keep more money in your pocket and reduce your overall expenses.

Buy Generic Brands: When you're shopping for groceries and household items, give the generic brands a shot. They often cost a lot less and can be just as good as the name brands. Consumer Reports found that store-brand foods cost an average of 27% less than their name-brand counterparts. Plus, a lot of times, the same companies make both the generic and name-brand products, just with different labels. Switching to generic brands can really help you save money without giving up quality, especially for basics like cereal, canned goods, and dairy. So next time you're at the store, try out the store brands and see how much you can save.

Set Specific Goals: Having clear savings goals can really help you stay motivated. Whether you're saving for a vacation, a new car, or a home, knowing exactly what you're working towards makes it easier to stick to your plan. Break down your goal into smaller, manageable milestones. For example, if you're saving for a $2,000 vacation, aim to save $500 every three months. This way, it feels less overwhelming, and you can track your progress more easily. Tony Robbins puts it well: "Setting goals is the first step in turning the invisible into the visible." By having specific goals, you give yourself a clear direction and purpose, making it more likely you'll achieve your financial dreams. By setting and achieving these smaller milestones, you build confidence and momentum, making it more likely you'll reach your larger financial goals.

We are Here to Help!

At Nuvision Credit Union, we know how important it is to save, and we're here to help you reach your financial goals. We offer a range of savings accounts and financial tools to support you, whether you're starting small or looking to save big.

Building a solid savings habit can give you peace of mind and set you up for a secure financial future. It's not just about how much you earn; it's about how much you keep and grow over time.

If you have any questions or need assistance, don't hesitate to reach out. We're here to support you every step of the way.