Right now, 47% of us are spending more than or equal to our income, according to data compiled by the Financial Health Network. What we can't pay for with our income we're putting on credit cards and other lines of credit, which takes away from our future savings.
Why do so many of us have such a hard time living within our means and 
building our savings? That varies from family to family, but we've observed a few key reasons over the years. Let's face it, for some it's merely a matter of choice. It's easier to go out to eat, buy without comparing prices, and saying yes to weekends away and fun excursions instead of saving for the future.
However, for some Nevadans, it's a matter of unpredictability. Many Nevadans work hourly wage jobs, and those hours can vary from week to week. That makes it harder to predict income and ensure you have enough to pay the bills and save for the future at the same time. It's harder, but not impossible.
Depending on where you are in life, we have some short-, medium-, and long-term savings ideas that you can use to build towards your ‘someday'.
Short-Term Goals
Age isn't a deciding factor here as everyone needs an emergency savings account. Your short-term savings efforts should focus on building emergency savings equal to about three months' worth of living expenses. This will help you be resilient financially in the face of unexpected expenses, job changes, unforeseen car repairs, and more.
There are a few great account options to build your emergency savings. Just remember that you'll want your emergency savings to be accessible if you need it, so avoid accounts that lock your money up for a set of period time or have early withdrawal penalties. A few great emergency savings account options include:
- A good ol' fashioned savings account. Open and regularly put money into a standard savings account. A standard savings account likely won't pay as much interest as a certificate of deposit or money market account, but it will be easily accessible if you need it.
- Move up to a money market account. A money market accounts can be a good tool for saving for emergencies as well. With higher balances, they often pay a greater yield than the standard savings account.
Medium-Term Goals
Medium-term savings goals often include a down payment on a house, your child's college education, an amazing wedding, or vacation of a lifetime. To get more from your savings, you'll want to utilize accounts that pay a higher rate of return. This can often mean locking your money away for a set period of time or having withdrawal restrictions and/or penalties so make sure this is money you will not need for awhile
- Start a college savings plan. This could include a 529 College Savings Plan. These accounts work just like a 401(k), but allow for parents, grandparents, and other family members) to make contributions up to a set, annual amount.
- Saving for the down payment on a house. A certificate of deposit (CD) is a great option. These accounts often pay a higher rate of return, but they do lock away your money for a set period of time and may contain penalties for early withdrawal.
Long-Term Goals
For most of us, the biggest long-term savings goal we have is retirement. There are a lot of options out there to help you work toward your ‘someday.' Saving at least 15% of your gross income will help you build a nice nest egg toward retirement, but the savings and/or investment vehicles you choose to get there can make all the difference.
Long-term saving and investment options vary greatly. From individual retirement accounts, to mutual funds, to stocks and bonds and more. You'll likely choose a variety of these for long term savings, and the options you choose all depend on your risk tolerance and your length of time until retirement.
We're Here to Help
Whether you're saving for the short-, mid-, or long-term, the savings and/or investment accounts you choose are a very important part of your overall financial strategy. That's why we highly recommend you chat with our CFS Financial Advisors with CUSO Financial Services, L.P.* They work with you to understand your long-term financial goals and then build a plan and choose a set of accounts to help you get there. Or, if you've got an existing retirement plan, they'll give you a complimentary second opinion portfolio review to help you understand if you're on track. Learn more at onenevadainvestments.com.
* Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The credit union has contracted with CFS to make non-deposit investment products and services available to credit union members.