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11 ways to save – at every life stage

When you stashed money in your piggy bank, how did that make you feel? Was there pride because you saved money instead of buying candy or a new toy? Did you feel accomplished?

You can – and should – have those feelings at every life stage because saving money has no age restrictions. With that in mind, consider using this timeline to take advantage of savings opportunities no matter how many candles are on your next birthday cake.

Pre-teen years and early teens

Pocket gift money and allowance. You know grandma’s birthday card is coming with cash. You finished your chores, so that’s $20 in allowance this week. This cash flow in your early years is a perfect time to begin a savings account. You likely have some savings goals at this life stage (a game system or bicycle, perhaps), and the earlier you can think about putting money aside for them, the better. Don’t be afraid to ask for cash instead of gifts or gift cards, but there are swap sites that will turn your gift cards into cash if your relatives and friends insist. More than saving money, you’re also building habits to make saving easier later in life.

Start a 529 college savings plan. Some parents start a 529 plan as soon as they know they’re expecting. That’s because with more time to save, the account can potentially grow larger. With college costs showing no signs of slowing down, having as much time on your side is a good thing. Funds in a 529 grow tax- free and aren’t taxed upon withdrawal when used for college costs. Another option is a custodial IRA, which parents or guardians can set up for their children with a minimum $1,000 contribution and invest $5,500 per year. If the child has a job, he or she can contribute to the IRA as well, up to the amount earned at the job. Because the principal amount can be withdrawn at any time for any reason without penalty, that comes in handy for life events such as a first car or college spending money. A minor takes control of the IRA upon turning 18, and there are no bank service fees associated with the IRA until he or she turns 20. One of our local bankers can help establish an IRA.

Later teens and 20s

Apply for scholarships, especially obscure ones. There’s a lot of free money out there to ensure you don’t have to pay full price for higher education. Scholarships can be merit- or need-based, but some are aimed at certain fields of study, geographic areas or specific schools. Then there are the really strange ones where you can win scholarships for duck calling or designing prom outfits out of duct tape. It pays to do your homework so you don’t have to use, or can use less of, your own funds.

Work while living at home. There’s no better way to increase your savings than by reducing your expenses. With living expenses usually the biggest part of a budget, it makes sense to earn as much money as you can while those costs are low or zero. Our bank believes in helping younger people just starting their financial journey. That’s why clients between the ages of 16 and 24 who open a Priority Series account can get the Access account with no monthly service charge. There’s no minimum balance needed to open any of the Priority Series accounts, so it’s easy to get started.

Pay yourself first. Before you think about putting your money toward anything else, it might be a good idea to make saving your first move. This savings habit is a key part of reaching your financial goals because it puts your future front and center. If you have a budget, factor in that recurring self-payment. Consider putting aside 10 to 15 percent, but if you feel you need time to adjust start with a smaller percentage and work your way higher. You’ll likely find you can adjust to the difference. Through our bank you can set up an automatic transfer from one account to another, which allows you to save without a second thought. For example, you can open a Priority Series account and schedule a recurring transfer, like $20 a week, to a savings account.

Live below your means. As our income increases, our style of living seems to rise with it. You can avoid that by ignoring when you get raises or bonuses and placing that extra cash directly into savings. Create a savings account separate from the one you use to pay your expenses so that money isn’t touched until it’s ready to be used for a savings goal. You can also create a budget to identify where your money goes and eliminate unnecessary spending or trim back where you can, such as eating out less or cutting or shrinking your cable bill.

Start a retirement savings through work or our bank. Like the 529 plan, the earlier you start this, the more time you have to grow your money. If your employer offers a retirement plan such as a 401(k), this is a great opportunity to put income aside before it hits your paycheck. If your employer matches up to a certain percentage, it’s a good idea to contribute at least that amount. If you don’t have a retirement plan at work or would like different investment options, we offer a multitude of investment options through a traditional or Roth IRA or our investment management services.

30s and 40s

Build an emergency fund. Unexpected and costly expenses, such as home and vehicle repairs or medical bills, can put you in debt and cost even more if you pay with a credit card and carry a balance. Creating an emergency fund lt; to cover three to six months of expenses helps ensure your savings goals stay on track and reduces your personal and financial stress. Part of ensuring you have enough available funds is trimming your costs wherever else you can. Opening or switching to one of our Priority Series of accounts can help with that by offering opportunities to reduce or completely waive the monthly service charge on any of the four accounts. The Priority Series also offers perks that can save you money, such as free checks, ATM fee refunds when you withdraw cash from an ATM outside of the Park National network, and overdraft Account Link protection.

Don’t let debt keep you from saving. Once you’ve built your emergency fund, it’s time to decide if you should pay your debt down aggressively or if you can create more of a balance by paying some and saving some. Look at the interest rate your debt carries. If you feel you can get a higher rate of return by investing, it could make sense to pay the debt’s minimum amount and invest more. If more of your debt is higher-interest credit card debt, it might make sense to pay off that first. Debt alone, however, shouldn’t be the determining factor on whether you save.

Buying bigger and better won’t necessarily make you happier. Warren Buffett, the icon of investment firm Berkshire Hathaway and one of the richest men in the world, lives in the same house he first bought in 1958 for $31,500 (or about $267,000 in today’s dollars). It’s an excellent lesson that you don’t need to leverage your wealth to feel rich as long as your needs are met and you’re happy. His home represents .001% of his wealth, but he’s never considered living anywhere else. Studies show that material things won’t make you happier, experiences will. So save money by bypassing the bigger home, the nicer car or the more luxurious boat, and increase your happiness!

50s and 60s

Max out retirement savings. At this stage you might want to put even more money away, especially if you’re falling short of your retirement goals. Once you reach age 50, you’re allowed to make catchup contributions to your retirement maximums. The amount varies based on the type of plan you participate in. For IRAs, which allow $5,500 in contributions annually, the catchup contribution is $1,000 on top of that. For a 401(k), 403(b) or other profit-sharing plan, which has a contribution limit of $18,500, the catchup is $6,000 annually. Ideally you have enough in retirement to cover 60% to 70% of your salary, which would also include any pensions and Social Security. Our retirement planning and investment calculators can help you refine how your future looks – whether you’re on the right path or if there’s more work to do.

As you accumulate more wealth, you want to ensure you’re putting it to good use no matter where it resides.

Our Priority Series Advantage account could be an excellent choice as you earn interest on balances of $2,500 or more.

Since 1883 we’ve provided services and know-how to help our clients at every life stage, because supporting your journey to financial independence is our everyday goal. Call us at 937.548.2122 or visit us today. We’re here to support and guide you every step of the way.

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