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Creative Techniques for Finding Money to Save Plus a Bonus: Saving Resources . 1. How would you you define savings ?. 2. One Montanan’s Definition . Amount left over after expenses…. 3. Which is, most of the time, zero . 4. Federal Reserve Board Definition.

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one montanan s definition
One Montanan’s Definition
  • Amount left over after expenses…

3

federal reserve board definition
Federal Reserve Board Definition
  • Savings is the process of setting aside a portion of current income for future use.

5

wikipedia economics definition
WIKIPEDIA Economics Definition
  • Saving is income not spent or deferred consumption.

6

question what year between 1962 2013 did americans have the highest rate of saving
Question: What year between 1962 & 2013 did Americans have the highest rate of saving?
  • 1962
  • 1975
  • 1983
  • 1991
  • 2000

7

slide9
2014
  • As of January
    • 3.9%

9

9

automatic deposits
Automatic deposits

Arrange for monthly automatic deposits from paychecks or checking to savings accounts for an emergency fund

slide13
Don’t have to think about it every payday

Can adjust/change as needed

Benefit!!

13

slide14

Save for Retirement

  • Arrange for automatic contributions to retirement plan:
    • tax deferred
      • (401k) (403b) (457)
tax deferred plan limits 401k 403b 457
Tax Deferred Plan Limits (401k, 403b, 457)

$17,500 – 2014

Catch up if age 50 & older

$5,500

slide16
Some plans offer loans foremergencies

Borrow if really, really, really needed

Benefit!!

slide17
Penalty if withdraw before age 59 ½

Less likely to make withdrawal

Penalty!!

slide18
IRAs

$5,500 yearly

Catch-up amount if age 50 & older

$1,000

slide19

Boost Saving by 1% More & have more at retirement

Assuming 8% rate of return; Pay Increases 3%

slide20

Boost Saving by 1% More & have more at retirement

Assuming 8% rate of return; Pay Increases 3%

technique 2
Technique #2

Once a loan is paid Pretend you are still making payments

Place former payment in savings

benefit
Benefit!!

Already altered lifestyle so you can make loan payments

A reallocation of payment to savings can be made without “sacrifice”

technique 3
Technique #3

Put 2014 state/federal tax refund into savings

tax refund
Tax Refund

A tax refund is not a “bonus” it’s a refund of your money that can become savings

benefit1
Benefit!!

It’s money you have already “adapted” to being without during the year

technique 4
Technique #4

Open an MSA

Montana Income tax “savings”

$207 if taxable income above $16,700

$414 for married couple

benefit2
Benefit!!

Saving tax money on medical expenses you have anyway

slide28

Question: What percent of Montanans have MSAs?

  • 1.4%
  • 25.2%
  • 53.6%
  • 70.3%
  • 92.5%

28

28

technique 5
Technique #5
  • Utilize creativity for saving… Techniques used by Montanans
piggy bank your extra coins
Piggy Bank Your Extra Coins
  • U. S. Treasury says Americans hold $15 billion in loose change
sock it away
Sock it away
  • Eastern Montana mother
    • Filled-up old socks with loose change & hid in the closet
hidden savings in checking account

Hidden Savings in Checking Account

Central Montana woman wrote checks for next $1 or $5 up in checking account register

Monthly she deposited the “extra” in savings

recipe box

Recipe Box

Western Montana Family who put money that they didn’t use for “eating out” in recipe box

Would go through weekly to show, “This is what we saved by not eating out…..

nothing week

Nothing Week

Central Montana Family saves money that would have spent on activities that cost

sugar bowl

Sugar Bowl

Woman on the high-line who squirreled away cash in sugar bowl at the top of the kitchen cabinet

under the mattress

Under the mattress

Grandpa in central Montana who hid money in envelope under his mattress

save lunch money

Save lunch money

Parents in northwest Montana packed lunches & totaled their savings

coupon

Coupon

Southeast Montana woman who saved money that would have spent without using coupon

technique 6
Technique #6

Kick habits that cost $$$$$$

slide42

Technique #7

  • Accelerate debt repayment so have money to save

42

slide43
Priority

Pay off highest interest rate debt first to save on interest

Which to accelerate?

bottom line benefits highest interest first
Bottom Line Benefits (Highest Interest First)
  • Time to Pay off Reduced by:
    • 6 years
  • Amount Saved in Interest:
    • $6,314.92
bottom line benefits highest interest first1
Bottom Line Benefits (Highest Interest First)
  • Amount Saved in Interest:
    • $6,314.92
  • No Power Pmt $12,578.17
  • Power Payment - 6,263.25
          • $6,314.92
orange side side 1
Orange Side--Side 1
  • Paying Just 3% on Your Credit Card Debt
    • Check the REAL cost
blue side side 2
Blue Side: Side 2
  • Pay MORE than 3% and Save a LOT
matt julie side 1
Matt & Julie—Side 1
  • Credit Card Debt
    • $10,000

53

slide54

Minimum Payment DANGER

On $10,000 Loan

  • $300
  • $9,421 in interest
  • 20 years to pay off
slide57
Once loans paid off the money not paid in interest is available for saving!

Benefit of Power Payments

slide58
Individually

As a couple

As a family

Technique #9: Establish Savings Goals & Track Progress Towards Them

slide59
Things?

Experiences?

Regardless MSU Extension has a tool for you

Goals: What are you saving for?

track n your savings goals register

Track’n Your Savings Goals Register

Funded by

Montana Credit Unions for Community Development

First Interstate BancSystem Foundation

technique 10
Technique #10
  • Moonlight for additional income for savings

66

slide67

Until Ron got me

this job, I didn’t realize

I was an important factor

in his savings plan.

slide68

Moonlight Savings

Assuming 5% rate of return

technique 11
Technique #11
  • Trade down to a smaller home

69

savings from smaller home
Savings from Smaller Home
  • Lower or no mortgage payment
  • Reduced maintenance costs
  • Lower utility bills
  • Lower property taxes
  • Lower insurance premiums
technique 12
Technique #12
  • Move to a less expensive location

72

slide76

Question: Which state in the U.S. is the most affordable to live in?

  • Montana
  • Texas
  • Oklahoma
  • Florida
  • Minnesota

76

76

slide77

Most Affordable States

  • Oklahoma
  • Tennessee
  • Idaho & Kentucky

http://money.msn.com/personal-finance/americas-cheapest-states-to-live-in

77

77

slide78
Friends/relatives

Media (TV, newspaper, magazines)

Internet-Web

Parents

Financial Planner

What are sources of advice about saving?

make a commitment to save by utilizing savings techniques that work for you then take action
Make a commitment to save by utilizing savings techniques that work for you, then take action!!!!!!!

Commitment

savings resources
Savings Resources

Organizations

Government Sources

usda extension http www csrees usda gov nea economics fsll publications 66 ways pdf
USDA—Extensionhttp://www.csrees.usda.gov/nea/economics/fsll/publications/66_ways.pdfUSDA—Extensionhttp://www.csrees.usda.gov/nea/economics/fsll/publications/66_ways.pdf

66 ways to Save Money

investing for your future www extension org pages 10984 investing for your future
Investing for Your Futurewww.extension.org/pages/10984/investing-for-your-future

eXtension:

11 lesson web/study at home course

eXtension-Sponsored by Rutgers University

nefe http www smartaboutmoney org portals 0 resourcecenter wealthcarekit insurance pdf
NEFEhttp://www.smartaboutmoney.org/Portals/0/ResourceCenter/WealthCareKit-Insurance.pdfNEFEhttp://www.smartaboutmoney.org/Portals/0/ResourceCenter/WealthCareKit-Insurance.pdf

Wealth Care Kit: A guide for financial wellness 

the money mammals www themoneymammals com
The Money Mammalswww.theMoneymammals.com

Teaching kids to share, save, and spend smart

question
Question

According to the (March 2013 Retirement Confidence Survey), what % of workers said they are very confident they’ll have enough for retirement?

85

slide86

What % of workers say they are very confident of having enough for retirement?

  • 30%
  • 20%
  • 15%
  • 13%
  • 5%

86

confidence survey 2013
Confidence Survey 2013

13%

lowest level since survey started in 1993

87

slide88
Easy-to-use, two-page worksheet

Helps you quickly identify approximately how much you need to save to fund a comfortable retirement

Ballpark E$timatewww.choosetosave.org/ballpark

department of labor http www dol gov ebsa pdf savingsfitness pdf
Department of Labor http://www.dol.gov/ebsa/pdf/savingsfitness.pdf

Savings Fitness: A Guide to Your Money and Your Financial Future

u s securities exchange commission www sec gov investor pubs roadmap htm
U. S. Securities & Exchange Commission www.sec.gov/investor/pubs/roadmap.htm

Get the Facts: The SEC’s Roadmap to Saving & Investing

slide91
Calculators on:

Auto

Bond

Budget

College

Credit Card

Employee Benefits

American Savings Education Councilwww.choosetosave.org/calculators

  • Home
  • Insurance-Disability
  • Insurance-Health
  • Insurance-Life
slide92
Calculators on (cont’d):

Mutual Fund

Paycheck Planning

Retiree-Health

Retirement

Roth IRA

Taxes

American Savings Education Councilwww.choosetosave.org/calculators

  • Stock
  • Savings
america saves www americasavesweek org
America Saveswww.americasavesweek.org

Designated week

February 24 – March 1, 2014

montana saves
Montana Saves

www.montanasaves.org

america saves savings messages
America Saves:Savings Messages

Receive savings tips and reminders straight to your phone

slide96
American Institute of Public Accountants:

Offers information to help consumers make sound financial decisions at every stage of lives.

www.360financialliteracy.org

slide97
Life Stages

Couples

Parents and Children

Home Owners

In Crisis

Retirees

www.360financialliteracy.org

97

97

slide98
Life Stages

Small Business Owners

Military and Reserves

Employed

College Students

Tweens and Teens

www.360financialliteracy.org

98

98

slide99
Get Savings Tips

E-mail

Phone

Join a discussion

Beat your brain

Feed The Pigwww.feedthepig.org

American Institute of CPAs

99

99

slide100
4, 5, 6th graders

The Great Piglet Challenge

Interactive Adventure in Saving & Spending

www.feedthepig.org/tweens

100

100

conclusion
Conclusion

Almost “overwhelming” amount of savings information

organizational & governmental resources

Find the source that “works” for you

understand yourself
Understand yourself
  • What motivates you to save?
question what is your primary goal for saving at this point in time
Question: What is your primary goal for saving at this point in time?
  • Retirement
  • Emergency fund
  • College education
  • Family vacation
  • New Car
  • New Home chat

103

savings bottom line
Savings bottom line……

Are you willing to delay gratification so you’ll have money to save?

in other words
In other words……

Are you willing to make a change in your behavior to make saving a priority?

in conclusion
In Conclusion

Best wishes as you select the savings technique that works best for you & explore savings resources