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Build your savings account by setting goals, making plan

This week is National America Saves Week Albert Einstein defined insanity as doing the same thing over and over again and expecting different results.

Are you ready to leave the realm of “insanity” to become financially fit?

Here are some tools to help you get there:

When was the last time you faced your credit report? You are entitled to at least one report annually from each of the primary credit reporting entities (Experian, Equifax and Transunion) using www.annualcreditreport.com.

A FICO score falls between 350 and 850. Only 25 percent of the Americans have a score of 700 or above. This results in lower insurance rates, mortgage rates and credit card or borrowing rates. Check your credit once every four months to ensure accurate information is being recorded for your debt activity.

Next, is your emergency fund able to cover three to six months of your essential expenses? Maybe even one month? Do you have an emergency fund or savings account?

This is more than a financial goal. Just knowing you have that stash (whatever the amount) gives you a feeling of independence and calm.

According to Bankrate.com, almost 40 percent of households (gross income of $75,000) could not cover a $1,000 unexpected expense. It’s not surprising that financial stress continuously ranks as Americans’ No. 1 stressor. Are finances your primary stressor?

Can you commit to building an emergency savings fund? It is amazing how fast that steady contribution grows. Next time you are ready to purchase a “non-essential,” back away. Instead of buying that non-essential or impulse item, immediately transfer that money from your checking account to your savings account. Take ownership of your money! Using your smartphone, you can set up the ability to transfer money to your savings account easily.

When was the last time you honestly looked at what you spent? Another eye-opening exercise is to periodically line up your last three months of bank statements. With a red pen, identify “need” versus “impulse” purchases?

Now, look at where the “fat” is and decide what can go. Evaluate the “need” expenses. Do you check them annually (insurance, phone, cable, utilities, food, etc.) to be sure you are getting what you “need.” Can any of these be modified?

In November, I talked about the urgency of starting a savings account as soon as possible. Compounding interest is startling! If you have a credit card bill, look at the time it takes to pay it off when you are paying someone else. What if you were able to save that amount instead?

The next basic step is to set a time to discuss specific goals. Write them down and figure out what you can do to achieve them and how long they will take to achieve. If you don’t have a plan, how do you know how or when you will get there? Guide your own future.

If you want more motivation, check the America Saves website, www.americasaves.org. It is your life. Are you where you want to be?

wendy.rice@colostate.edu or 382-6461. Wendy Rice is the family and consumer science agent for the La Plata County Extension Office.



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