“Anything that we can do to raise personal savings is very much in the interest of this country.” – Alan Greenspan
The FPA, along with more than 1,000 non-profit, government, and corporate groups, supports America Saves Week, this February 20-27.
There is never enough to be said about the personal reasons to save: it puts you on firm financial footing, building a safety net and foundation for you to grow from.
But, how often have you considered the national benefits that arise from your simple act of saving?
During rocky economic times, your savings safety net extends over others as well. Below are some of the ways everyone benefits when we save money:
Savings are the backbone of our capitalistic system. Barron’s Dictionary of Finance and Investment Terms defines ‘capital formation’ as the creation of producer goods — such as buildings, machinery, and equipment to produce other goods — through saving, which results in economic expansion. The process of economic growth begins with the act of saving; or, as my college professor David Breuhan notes in his book Spread the Wealth: “Capital is the core of capitalism.”
Savings support the small business owner and their community.When there are savings available to lend, it is the small business owner’s local community that benefit the most. Not only are jobs created when businesses expand locally, but jobs are required to provide public and private services to those employees, benefiting the community even more.
The act of saving shows others positive financial habits. Much of our relationship with money is learned from family members and those around us. Promoting positive financial habits sets an example for those around you and teaches them the value of saving for the future.
Savings create the backbone of our economy, and our own financial plans. If not for savings, we would not have the ability to: take risks for growth to meet our long-term goals in other parts of our portfolio, take advantage of opportunities that require savings, and feel comfort that we are able to weather financial storms as they arise.
And so during this week, kick start a savings habit! Below are a few ideas on how to get started now:
-This year every worker is getting an extra 2% in their paychecks thanks to a payroll tax reduction. Start saving at least this unexpected amount from your paycheck automatically.
-Are you one of the many who use Uncle Sam as a no-interest savings bank, and receive a large tax refund annually? This year, instead of spending all of your money, save your tax return – and deposit it directly to a savings account, or split your refund over several accounts by asking your preparer to file Form 8888 – Allocation of Refund.
-Talk to your tax preparer or financial adviser about keeping more of your money this year in your regular paychecks, instead of waiting until next year to get that bloated refund check. Instruct your employer to send that money directly to a savings account.
If you need more ideas, spend some time with the Savings category here on the blog, which currently has more than 70 postings to give you the information and encouragement to implement a successful savings program. But, above all else this Savings Week, I hope you learned just a little more about the power that the simple act of saving can have for the good of us all.
The preceding blog was originally published by the Financial Planning Association®(FPA®). To view the original blog please visit the FPA Web site (http://blog.fpaforfinancialplanning.org/2011/02/23/saving-your-part-in-f...).
Robert Schmansky has a wealth of personal finance experience in insurance, banking, professional money management, and holistic financial planning.
Rob began his career with a fee-only financial planning firm specializing in investment management and tax planning; he subsequently worked as an advisor for one of Michigan’s largest independent investment management firms before founding Clear Financial Advisors in 2011.
Rob earned a B.S. in human ecology from The Ohio State University, majoring in family resource management, and a M.A. in economics from Walsh College. His professional credentials include CERTIFIED FINANCIAL PLANNER™ (CFP®), Chartered Financial Consultant (ChFC), and Chartered Advisor for Senior Living (CASL). Rob is a participating member of the Financial Planning Association (FPA) and the National Association of Personal Financial Advisors (NAPFA).
A lifelong student of personal finance with a commitment to consumer education, Rob has taught required courses for the CFP® examination as an adjunct instructor at Saginaw Valley State University. He has been a contributing writer to the FPA’s blog All Things Financial Planning; an investment expert for FiLife, a former Dow Jones/IAC joint Internet venture; and a writer for other publications including Yahoo! Finance.
Rob is frequently quoted in the media, including the Wall Street Journal, Dow Jones Newswires, MarketWatch, National Public Radio, and other industry and consumer outlets.
In his free time, Rob enjoys coaching youth lacrosse, reading fiction and books on historical people and events, and jogging.