You have a target on your savings goals, but you also need cash to pay the bills. Not to mention, you’ve probably heard or read you should be saving more for retirement.
The list of things you should be doing with your money can seem endless – and a little tricky to balance. You might be wondering, what should you be doing? And, is it possible to do it all?
Navy Federal recently surveyed consumers across the US and found most are focused on day-to-day living. And rightfully so – taking care of your operating costs, or the living expenses, is most pressing.
So, how can support your “everyday” financially?
Before you start saving or investing, you need a healthy balance in your checking account. Avoid relying solely on credit for purchases, but if you’re able to pay your statement balance off each month, you can use your credit card responsibly.
These are just some of the basics of day-to-day spending. But with these covered, you can begin to build your savings and invest for retirement.
But you don’t have to choose between saving for a rainy day or to build wealth. The good news is you can do both, despite most Americans feeling differently. In fact, the same Navy Federal survey found most people believe they need at least $25,000 in savings before they could start investing.
Saving and investing share similarities, but they aren’t dependent on each other. The choice is yours.
Most financial professionals will recommend you keep at least 3 to 6 months of pay in a savings account that’s reserved for emergencies only. This can help you cover unexpected expenses – without having to use high-interest credit.
Once you’ve built your emergency fund, the next step is up to you. Be realistic about your goals. You don’t want to save too aggressively and break your budget. It’s about saving what you can.
If the word “investing” sounds to you like things could get complicated, you’re not alone. One-third of survey respondents felt unfamiliar with the investment options out there. But investing is the key to saving for retirement and building long term wealth. And the truth is, investment options have never been more accessible than they are today.
“In today’s world, you don’t need to be an expert or watch the markets every day. There are plenty of options to easily get going with relatively small amounts of money.” – Mathu Mathu, AVP of Operations, NFFG
“We turn on the news and hear about the markets. They’re up or they’re down, investors are buying and selling and as consumers, we don’t know what to make of it,” said Mathu Mathu, assistant vice president of operations at Navy Federal Financial Group.
Over the last 30 years, the stock market has averaged an 8 percent annual return. Understand that investing involves risk with the potential loss of principal. So if you’re looking to build wealth over the long-term, a low-cost brokerage account could be a great tool for you or you can make an appointment with a financial advisor to discuss your options. Investing is also a great way to protect your assets against inflation – another hot topic in the news these days.
How does a brokerage account work?
- If you choose to open your own brokerage account like the EasyStart Investor, you can start with just $25 a month. Most online tools are simple, and have options for first time investors.
- The more time you give your money to grow, the greater the chances are for you to reap the benefits of compounding. You’ll want to get started today so your principal investment can grow with your portfolio.
- Be patient and steadfast – it won’t happen overnight.
Putting it all together
Remember it’s not all black and white. You can focus on today, save for tomorrow and invest for your future at the same time. It might take some budgeting, but it’s possible!
A pay raise or promotion can be a great time to start. Or if you can find some wiggle room in your budget, or have a little extra leftover after you’ve paid off a debt. Consider dividing the extra cash between saving, investing and another line item. That could be even more debt reduction or just some good ol’ fashioned dining out.
Choosing to tackle your everyday expenses while saving for a rainy day and investing shouldn’t be stressful. In fact, it can bring you peace of mind knowing you’re prepared for today and your future.
Nondeposit investment and insurance products are offered through Navy Federal Financial Group, LLC, (NFFG) and through its subsidiary, Navy Federal Brokerage Services, LLC (NFBS), a member of FINRA/SIPC and an SEC registered investment advisory firm. Brokerage and advisory products are offered through NFBS. These products are not NCUA/NCUSIF or otherwise federally insured, are not guaranteed or obligations of the credit union, are not offered, recommended, sanctioned, or encouraged by the federal government, and may involve investment risk, including possible loss of principal. 1-877-221-8108.