Simply Save

Easy Tips to Save Your Money

By Carin L. Weisman

My journey into financial literacy began fresh out of college when I found myself writing about 401(k) plans and the wonders of compound interest. “Wait,” I remember asking my boss, “If I put away a few dollars every week now, I could really retire with over a million dollars?” It seemed too good to be true, but I took the plunge and never looked back.

Unfortunately, my experience is not the norm. According to Forbes Advisor’s latest survey, 28% of Americans have less than $1,000 in personal savings, with many unsure how to begin. If you are in that camp, fear not! I spoke with Registered Investment Advisors and father-son duo Neil and Evan Kenagy of Colchester Investment Counsel, who serve clients throughout the 068 about their expert tips and strategies to simplify and supercharge your savings, regardless of your life stage.

“Just like physical health, financial health is critical for overall well-being,” says Neil. “It means spending less than you earn, sticking to a budget, setting realistic goals, maintaining an emergency fund, and understanding your investments.”

Here are their top 8 tips
to make saving for your
future simple:

Start early. The sooner you start saving, the longer your money has to grow and the longer you can reap the benefit of compounding returns. (Compounding is when you earn interest/returns on both your initial investment and the additional interest/returns you receive over time.) If you are already saying, “oh no” because you didn’t start early don’t worry – you can catch up: The IRS allows people age 50+ to make catch-up contributions to IRAs and 401(k)s.
Create a budget. Not having a budget is like driving through Redding without a map…you will get lost! Use an online tool or simple spreadsheet to detail the cost of major expenses, and then review the list to see where you can reduce spending and enhance savings. For example, instead of buying lunch every day, make lunch four days of the week and go out on the other. A general rule is to consider 60% for essential expenses, 20% for discretionary (i.e., fun!) spending, and 20% for saving.
Know that every penny counts. Put some amount of money away every week, even if you are on a tight budget. “Some clients hesitate to save, thinking small dollar amounts won’t make a difference,” says Neil. “But they do! And when you store the money in high-yield savings accounts, IRAs, and 401(k)s, your money will start working for you!” If your employer offers a retirement plan and/or health savings plan match, enroll and take advantage of the “free” money.
Go back to basics. Instill in children the savings habit early by giving them a piggy bank to watch their money grow. As they get older, open a bank account for them and review the monthly statement together, so you can talk about important topics like the value of saving (for that new bike, perhaps?), living within one’s means, and the difference between wants and needs. “It’s never too early to help children understand the connection between hard work and having money,” says Evan.” I remember making my bed and helping in the yard to earn my allowance.”
Keep it simple. One easy hack is to set up automatic, direct deposit deductions from your paycheck, so you don’t forget to put the money away – and you get used to living on less. “Some are resistant to this idea at first,” says Neil, “but they invariably circle back to say how easy it was and how much they appreciate the tip.”
Go out of state. When it comes to saving for college, 529 plans are a terrific option, as they use after-tax funds, so contributions grow tax-free until they are withdrawn for qualified education expenses. “And you don’t need to stay within your own state,” says Evan. “Consider other states’ plans that may be cheaper with more favorable long-term investment results.”
Don’t go it alone. There are many resources available to help you get and stay on track, including one-on-one financial advisors, online tools, and even financial health support groups! “I got into this field so I could help people accomplish their life goals in a careful, understandable, and responsible manner,” says Neil.
Just do it. If this all feels a bit overwhelming, step back, take a deep breath, and know that many people are in the same situation. “Don’t feel discouraged,” says Evan. “Start small and remember that any effort, no matter how modest, makes a difference.”

For more personalized advice, contact Neil and Evan Kenagy of Colchester Investment Counsel LLC at: (203) 438-0046, nsk@colchesteric.com, or www.colchesteric.com.