Saving is good.
The big problem is how to get people to put money away.
Sometimes, turning spenders into savers is as easy as setting up an automatic transfer from checking to savings, or enrolling in a workplace retirement plan. Other times, it's not the desire that's lacking, it's the money.
A new survey of more than 1,000 Americans conducted for America Saves Week, an annual event put on by 100-plus organizations to promote savings, found that the less you earn, the less likely you are to have a savings account.
Add in the times, when pay cuts are the norm, and how can Americans, especially the working poor, save much of anything?
But while proposals wend their way through Washington on everything from giving savings accounts to newborns to establishing automatic workplace pension plans, what can we do to ramp up savings?
Start small: Tracy Fischman, executive director of AccountAbility Minnesota, a nonprofit that prepares taxes for low-income people, suggests that those living paycheck to paycheck get into the savings habit with as little as $5 per week. Jason Fichtner, chief economist for the Social Security Administration, suggests $2 per day.
Automate: Studies show that people are more likely to stick with saving if it's effortless. The Financial Services Roundtable, a trade group of large financial institutions, is urging members to offer free regular transfers from checking to savings, low minimums for automatic savers and incentives for customers to put savings on autopilot. Set up regular transfers into a U.S. Bank S.T.A.R.T. (Savings Today and Rewards Tomorrow) account, for example, and you'll receive a $50 Visa gift card when your balance reaches $1,000. (Wouldn‘t a $50 savings bonus make for a more consistent message?)
Save your refund: A CompleteTax survey showed that more than a third of taxpayers plan to save their refunds this year, but workers making less than $50,000 are most likely to pay bills with theirs. Since 2006, Fischman's group has helped open 2,200 savings accounts.
Get the match: If your employer matches a certain amount of retirement savings, try to snatch that free money. Unfortunately, this benefit was one of the first things many employers cut in the recession. But eight in 10 companies plan to bring them back in 2010, according to human resources consultant Hewitt Associates. The bad news is that one-third of employees with 401(k) plans don't receive matching funds in any economy, and not every employee has a workplace retirement plan.
Find a match somewhere else: Individual Development Accounts are designed to help low-income people build assets by matching savings to help start a business, buy a house or get an education. Learn more about these accounts at idaaccount.com. You can also check IRS.gov Publication 590 to see whether you qualify for the Saver's Credit, which will match up to $1,000 in retirement savings for individuals and up to $2,000 if filing jointly.
Take action: America Saves Week was the last week in February, but you can take stock of your progress all year and sign up for monthly savings messages at americasavesweek.org.Copyright © 2015, The Baltimore Sun