Creative Techniques
for Finding Money to
Save
Plus a Bonus:
Saving Resources
11
How would
you you
define
savings?
22
One Montanan’s
Definition
•Amount left
over after
expenses…
33
Which is,
most of the
time, zero

44
Federal Reserve
Board Definition
• Savings is the
process of setting
aside a portion of
current income
for future use.
55
WIKIPEDIA
Economics Definition
• Saving is income
not spent or
deferred
consumption.
66
Question: What year between
1962 & 2013 did Americans have
the highest rate of saving?
o
o
o
o
o
1962
1975
1983
1991
2000
77
Personal Savings Rate
1962-2013
•May 1975
•14.6%
8
8
2014
•As of January
•3.9%
99
$aving
Technique$
used by
$uccesful
$avers
10
10
Technique #1
Make
savings
automatic
11
Automatic deposits
• Arrange for monthly
automatic deposits
from paychecks or
checking to savings
accounts for an
emergency fund
12
Benefit!!
• Don’t have to
think about it
every payday
–Can adjust/change
as needed
13
13
Save for Retirement
• Arrange for
automatic
contributions to
retirement plan:
tax deferred
(401k) (403b) (457)
14
Tax Deferred Plan Limits
(401k, 403b, 457)
• $17,500 – 2014
• Catch up if age
50 & older
• $5,500
15
Benefit!!
• Some plans offer
loans for
emergencies
• Borrow if really, really,
really needed
16
Penalty!!
• Penalty if withdraw
before age 59 ½
Less likely to make
withdrawal
17
IRAs
• $5,500 yearly
• Catch-up amount if
age 50 & older
 $1,000
18
Boost Saving by 1% More &
have more at retirement
Salary
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Age
25
$102,827
$123,393
$143,958
$164,523
$185,089
$205,654
Assuming 8% rate of return; Pay Increases 3%
Age
35
$41,639
$49,967
$58,295
$66,623
$74,951
$83,279
19
Boost Saving by 1% More &
have more at retirement
Salary
Age
40
$25,000
$25,675
$30,000
$30,810
$35,000
$35,945
$40,000
$41,080
$45,000
$46,215
Assuming 8% rate of return; Pay Increases 3%
$50,000
$51,351
Age
50
$8,559
$10,271
$11,983
$13,695
$15,047
$17,118
20
Technique #2
• Once a loan is paid
Pretend you are still
making payments
Place former
payment in savings
21
Benefit!!
• Already altered lifestyle so
you can make loan
payments
 A reallocation of payment
to savings can be made
without “sacrifice”
22
Technique #3
•Put 2014
state/federal
tax refund
into savings
23
Tax Refund
• A tax refund is not
a “bonus” it’s a
refund of your
money that can
become savings
24
Benefit!!
• It’s money you
have already
“adapted” to
being without
during the year
25
Technique #4
• Open an MSA
• Montana Income tax
“savings”
$207 if taxable income
above $16,700
$414 for married couple
26
Benefit!!
• Saving tax
money on
medical
expenses you
have anyway
27
Question: What percent
of Montanans have MSAs?
o
o
o
o
o
1.4%
25.2%
53.6%
70.3%
92.5%
28
28
Percent of Montanans
with MSAs
• Only 1.4%%
29
29
Technique #5
• Utilize
creativity for
saving…
Techniques used by
Montanans
30
Piggy Bank
Your Extra Coins
•U. S. Treasury says
Americans hold
$15 billion in loose
change
31
Sock it away
•Eastern Montana
mother
•Filled-up old socks
with loose change &
hid in the closet
32
Hidden Savings in
Checking Account
• Central Montana
woman wrote
checks for next $1
or $5 up in checking
account register
• Monthly she deposited
the “extra” in savings
33
Recipe Box
• Western Montana
Family who put money
that they didn’t use for
“eating out” in recipe
box
• Would go through weekly
to show, “This is what we
saved by not eating out…..
34
Nothing Week
• Central Montana
Family saves
money that
would have spent
on activities that
cost
35
Sugar Bowl
• Woman on the
high-line who
squirreled away
cash in sugar bowl
at the top of the
kitchen cabinet
36
Under the
mattress
• Grandpa in central
Montana who hid
money in envelope
under his mattress
37
Save lunch
money
• Parents in
northwest Montana
packed lunches &
totaled their
savings
38
Coupon
• Southeast Montana
woman who saved
money that would
have spent without
using coupon
39
Technique #6
• Kick
habits
that
cost
$$$$$$
40
Money Saved if not spent
on Everyday Items
Item
Snack/Candy/Soda
Coffee, Latte, Etc
Fast Food Meal
Yearly
Savings
$360
$1,140
$1,320
41
Technique #7
• Accelerate debt
repayment so
have money to
save
42
42
Which to accelerate?
• Priority
Pay off highest
interest rate debt
first to save on
interest
43
PowerPay Web site
(Utah State UniversityExtension)
https://powerpay.org
44
44
Without Power Payments
(Highest Interest First)
Creditor Name # of payments
Total Paid
Int. Paid
Chase Auto
31
$7970.04
$770.04
Mastercard
119
$23039.93 $11472.92
Security Bank
49
$3617.69
$267.69
Lowes
14
$1317.51
$67.51
Payoff Time
Total Paid
Total Interest
9 years 11 months
May 2010
$35,945.17
45
$12,578.17
45
With Power Payments
(Highest Interest First)
Creditor Name # of payments
Total Paid
Int. Paid
Chase Auto
31
$7970.04
$770.04
Mastercard
47
$16725.36 $5158.36
Security Bank
47
$3617.34
$267.34
Lowes
14
$1317.51
$67.51
Payoff Time
Total Paid
Total Interest
3 years 11 months
May 2013
$29,630.25
46
$6,263.25
46
Bottom Line Benefits
(Highest Interest First)
• Time to Pay off Reduced
by:
–
6 years
• Amount Saved in Interest:
–
$6,314.92
47
Bottom Line Benefits
(Highest Interest First)
• Amount Saved in Interest:
–
•
•
$6,314.92
No Power Pmt
$12,578.17
Power Payment - 6,263.25
$6,314.92
48
Technique #8
•Kick the
minimum
payment habit
on credit
cards!!!!!
49
Credit
Card
Smarts
Calculator
50
Orange Side--Side 1
• Paying Just 3%
on Your Credit
Card Debt
Check the REAL cost
51
Blue Side: Side 2
• Pay MORE
than 3% and
Save a LOT
52
Matt & Julie—Side 1
•Credit Card
Debt
$10,000
53
53
Minimum Payment DANGER
On $10,000 Loan
• $300
• $9,421 in interest
• 20 years to pay off
54
Increase payment
amount--Side 2
PMT
Years
$400
13 years
$600
8 years
Interest
$5,738
$3,226
Savings
$3,226
$6,195
55
55
Another Example
Debt: $25,000
10% APR
$330.38
$531.18
$631.18
$731.18
Years
10
5
4
3.3
Interest
$14,645
$6,871
$5,467
$4,548
56
Benefit of Power
Payments
• Once loans paid
off the money not
paid in interest is
available for
saving!
57
Technique #9: Establish
Savings Goals & Track
Progress Towards Them
• Individually
• As a couple
• As a family
58
Goals: What are you
saving for?
• Things?
• Experiences?
• Regardless MSU
Extension has a
tool for you
59
Front Cover
60
Track’n Your Savings
Goals Register
• Funded by
 Montana Credit Unions
for Community Development
 First Interstate BancSystem
Foundation
61
What are you saving for?
Savings Goals
62
Decide on Amount Needed:
Figure 2
63
My Savings Goals:
Figure 2
64
Recording a Savings Deposit
Figure 4
65
Technique #10
• Moonlight
for additional
income for
savings
66
66
Until Ron got me
this job, I didn’t realize
I was an important factor
in his savings plan.
67
Moonlight Savings
Yearly
Age 25 - 65 Age 45-65
Amount
$1,000
$120,800
$33,066
$2,000
$241,600
$66,132
$3,000
$362,400
$99,198
$4,000
$483,199 $132,264
Assuming 5% rate of return
68
Technique #11
• Trade down to a
smaller home
69
69
Retire? Sure, Cheryl
you can retire….if we
live in a tent!
Ha, Ha, Ha,
Ha, Ha, Ha,
70
Savings from Smaller
Home
• Lower or no mortgage
payment
• Reduced maintenance
costs
• Lower utility bills
• Lower property taxes
• Lower insurance premiums
71
Technique #12
• Move to a less
expensive
location
72
72
Move within Montana
73
Montana Average
Home Price
City
Bozeman
Missoula
Billings
Anaconda
Chinook
Ekalaka
Median Cost
$227,300
$144,300
$138,400
$102,800
$96,800
$74,100
74
Move to another State
75
Question: Which state in the
U.S. is the most affordable to
live in?
1.
2.
3.
4.
5.
Montana
Texas
Oklahoma
Florida
Minnesota
76
76
Most Affordable States
1. Oklahoma
2. Tennessee
3. Idaho &
Kentucky
http://money.msn.com/personal-finance/americas-cheapest-statesto-live-in
77
77
What are sources of advice
about saving?
oFriends/relatives
oMedia (TV, newspaper,
magazines)
oInternet-Web
oParents
oFinancial Planner
78
Commitment
Make a commitment to
save by utilizing savings
techniques that work for
you, then take
action!!!!!!!
79
Savings Resources
• Organizations
• Government
Sources
80
USDA—Extension
http://www.csrees.usda.gov/nea/economics/fs
ll/publications/66_ways.pdf
•66 ways to
Save Money
81
Investing for Your Future
www.extension.org/pages/10984/investingfor-your-future
• eXtension:
11 lesson
web/study at home
course
 eXtension-Sponsored by
Rutgers University
82
NEFE
http://www.smartaboutmoney.org/Portals/0/
ResourceCenter/WealthCareKit-Insurance.pdf
• Wealth Care Kit: A
guide for financial
wellness
83
The Money Mammals
www.theMoneymammals.com
• Teaching kids to
share, save, and
spend smart
84
Question
• According to the (March
2013 Retirement
Confidence Survey), what
% of workers said they
are very confident they’ll
have enough for
retirement?
85
85
What % of workers say they are
very confident of having enough
for retirement?
1.30%
2.20%
3.15%
4.13%
5. 5%
86
86
Confidence Survey 2013
•13%
• lowest level since
survey started in 1993
87
87
Ballpark E$timate
www.choosetosave.org/ballpark
• Easy-to-use, two-page
worksheet
–Helps you quickly identify
approximately how much
you need to save to fund a
comfortable retirement
88
Department of Labor
http://www.dol.gov/ebsa/pdf/savingsfitness.pdf
• Savings Fitness: A Guide to
Your Money and Your Financial
Future
89
U. S. Securities & Exchange
Commission
www.sec.gov/investor/pubs/roadmap.htm
• Get the Facts: The SEC’s
Roadmap to Saving & Investing
90
American Savings
Education Council
www.choosetosave.org/calculators
• Calculators on:

 Auto

 Bond
 Budget

 College
 Credit Card

 Employee Benefits
Home
InsuranceDisability
InsuranceHealth
Insurance-Life
91
American Savings
Education Council
www.choosetosave.org/calculators
• Calculators on (cont’d):
 Mutual Fund
 Stock
 Paycheck Planning  Savings
 Retiree-Health
 Retirement
 Roth IRA
 Taxes
92
America Saves
www.americasavesweek.org
• Designated week
February 24 –
March 1, 2014
93
Montana Saves
www.montanasaves.org
94
America Saves:
Savings Messages
• Receive savings tips
and reminders straight
to your phone
95
www.360financialliteracy.org
 American Institute of
Public Accountants:
 Offers information to help
consumers make sound
financial decisions at every
stage of lives.
96
www.360financialliteracy.org
• Life Stages
 Couples
 Parents and Children
 Home Owners
 In Crisis
 Retirees
97
97
www.360financialliteracy.org
• Life Stages
 Small Business Owners
 Military and Reserves
 Employed
 College Students
 Tweens and Teens
98
98
Feed The Pig
www.feedthepig.org
American Institute of CPAs
• Get Savings Tips
 E-mail
 Phone
• Join a discussion
• Beat your brain
99
99
www.feedthepig.org/tweens
• 4, 5, 6th graders
• The Great Piglet Challenge
 Interactive Adventure in
Saving & Spending
100
100
Conclusion
• Almost “overwhelming”
amount of savings
information
 organizational &
governmental resources
• Find the source that
“works” for you
101
Understand yourself
• What motivates
you to save?
102
Question: What is your
primary goal for saving at
this point in time?
o
o
o
o
o
o
Retirement
Emergency fund
College education
Family vacation
New Car
New Home chat
103
103
Savings bottom line……
• Are you willing to
delay gratification
so you’ll have
money to save?
104
In other words……
• Are you willing to
make a change in
your behavior to
make saving a
priority?
105
In Conclusion
• Best wishes as
you select the
savings technique
that works best for
you & explore
savings resources
106