Saving At Any Age: Establish This Healthy Habit
America Saves Week 2023, February 27–March 3, is an annual call to action for everyday Americans to commit to saving successfully.
LSS Financial Counseling is among the participating organizations that are encouraging everyone nationwide to set a goal for savings and make a plan to maintain or improve financial wellness.
This blog was written by America Saves for the America Saves Week initiative coordinated by the Consumer Federation of America (CFA).
Saving. Do you view it as an ongoing journey? Or do you consider saving as some place you arrive at? Saving is a habit, not a destination; and it’s a habit that can be formed at any age. Whether you are a parent trying to instill this habit in your children or you want to change your own saving behaviors, there are strategies that savers of all ages can develop.
Research tells us that children’s money habits are often formed by age seven, so starting early to teach them about saving can have a huge impact. Many parents are accustomed to hearing frequent requests from their children about a toy, game or piece of clothing that they “just have to have.” Sound familiar? Using these wants is a great way to help children learn to save.
Children can learn to set a saving goal and figure out how long it will take to save enough money for their goal. Create a fun system to track progress, provide regular encouragement, and use incentives such as matching funds. Talk about how it feels to see your money grow, and don’t forget to lead by example — show children how you are saving.
You can also give children the opportunity to make some decisions about their money. Supporting children from a young age to make choices about money they earn or receive as gifts is a great way to build that confidence.
For young adults, as they begin to earn a regular and potentially higher income, a strong foundation begins with basic understanding of the difference between needs and wants. The system of automatic saving, especially through paychecks with split deposit, can set young adults on the path to a lifelong saving habit.
It can be hard to stay motivated when setting aside money for something in the future no matter what your age. It’s easy to focus on what you want in the moment. We don’t want to wait to purchase that expensive pair of sneakers. We want to take a trip in the next three months. Retirement is so far off that it feels OK to spend more of your current income right now and catch up later. In each of these scenarios, we aren’t thinking about our future selves, just who we are and what we want today.
Thinking of our future self — what we will want, what we will be doing, what we will believe — is one way we can develop a saving mindset. Asking questions about our future selves helps us create a vision for our future. For example, consider:
- Where does your future self live?
- What does a typical day look like for your future?
- What hobbies does your future self enjoy?
- How much money does your future self earn?
Later go back and read your answers to see how they compare to the present. Having the ability to look ahead, even if it’s a short time in the future, is a great way to reinforce saving today for tomorrow. This exercise can be done at any age, even with children.
LSS Financial Counseling is here to help all people achieve or improve their financial wellness. If you would like a free financial counseling session from a trusted nonprofit, call 888.577.2227 to schedule a phone, virtual or in-person appointment, or get your support online.