Make 2014 Your Year to Save

By Gerri Walsh, President, FINRA Investor Education Foundation & Senior Vice President, FINRA Investor Education

It’s simple. It’s easy to do, and it’s a great New Year’s resolution! Take the plunge and start a savings or investment plan in 2014. It is the first crucial step toward achieving financial independence.

Time is on your side. It’s one of the most powerful investment tools available. Time puts compound interest to work for you, growing your savings at a quickening pace. So it makes sense to start saving and investing even a small portion of your paycheck this year.

Yet even those of us who understand the time value of money, and how important it is to save and invest for ourselves and our families still put it off. Why do so many hesitate to take the first step of setting goals and forging ahead? I have a hunch. I think it’s a fear of failure.

This anxiety can show up in the following ways:

  • Believing that we don’t have enough money to start saving.
  • Allowing ourselves to be intimidated by the world of finance and investment, therefore never taking the plunge.
  • Worrying that now isn’t the “right time” to start saving or investing.
  • Avoiding any risk, rather than assuming a prudent level of investment risk.

This fear of failure can become a huge obstacle in the path to financial independence. Here’s how you can overcome this fear. 

  • Put your savings on auto-pilot. Service members and federal employees can use allotments to direct some portion of their pay to savings—including the Thrift Savings Plans and a savings account at a bank or credit union. Private-sector employers sometimes offer similar ways for you to “pay yourself first.”
  • Start small. See how quickly your savings add up. Or, put a modest sum of money into an investment and track its performance over time. This will help you gain confidence about managing your money as you watch your investment grow.
  • Become better educated in finance and investments. Here’s how:
    • Learn some of the vocabulary used by investment professionals—it will help to demystify the world of savings and investment. 
    • Read the business section of your paper—and online business and financial news—or other consumer-focused financial publications. Many are very inexpensive, and some are free.
    • Visit your community library. It often has a wide array of financial and investment publications at your disposal.
    • Surf the Web for financial information - but be careful. Not all financial and investment sources online give sound advice. Beware of websites trying to sell you something. There are predators in the financial world who are ready to pounce—and they can be extremely persuasive, charming and believable. Go with investment sources you trust, or are recommended to you by investment professionals or trusted friends. And be sure to check the background of anyone who helps you manage your money before you turn over your money.

A good way for service men and women to start a savings plan is to take the Military Saver Pledge through Military Saves, and participate in Military Saves Week, which begins 24 February. This commitment will put you on the path to financial independence.

Achieving financial independence usually requires investing regularly too. Check out SaveAndInvest.org for a proven approach to smart investing. It’s smart to start.

Tip of the Day

  • Written by Guest Blogger | September 30, 2014

    Develop a long-term plan and foundation for financial readiness by establishing a spending plan. More tips at: http://ow.ly/sCvQQ

Saver Stories View all »

Money on the Side

Written by Super User | November 26, 2010

Camp Arifjan, Kuwait -- A colonel in the 1st Theater Sustainment Command has money on his mind.

Army Col. George Fields, the Chief of Intelligence, or G2, has been teaching a free "Managing Your Money" class here in his spare time. More than 400 students have attended his six week-long class to learn more about increasing their own finances.

Read more...

60 Teens participate in Massachusetts Youth Saves Program

Written by Super User | November 26, 2010

During the months of June & July, 60 teenagers aged 13-19 from Marine, Coast Guard, Army, and Air Force families attended Youth Saves programs across the Commonwealth of Massachusetts to help increase their knowledge of financial literacy. Jonathan Harrington, Personal Financial Counselor for the MA Guard & Reserve, created the Youth Saves program to fit into the Military Youth Saves (www.militarysaves.org) theme which encourages kids and teens to develop good savings habits at a young age.

Read more...

One That Almost Got Away

Written by Super User | November 26, 2010

Brody Lockwood - Like a typical fledgling, I started down the track of financial indebtedness. Nineteen years old and nothing to lose. Credit - who need it? Savings - that was for older people with responsibility. Debt - my parents were in debt ergo it must be OK. When I was eligible for reenlistment, I reenlisted for a multiple of 3 worth $15K. I was happy to pay off my debt, but would I be able to stay out of debt?

Read more...