Creative Techniques for Finding Money to Save Plus a Bonus: Saving Resources

1. Creative Techniques for Finding Money to Save Plus a Bonus:Saving Resources 1

2. How would you you define savings? 2

3. One Montanan’s Definition • Amount left over after expenses… 3

4. Which is, most of the time, zero  4

5. Federal Reserve Board Definition • Savings is the process of setting aside a portion of current income for future use. 5

6. WIKIPEDIA Economics Definition • Saving is income not spent or deferred consumption. 6

7. Question: What year between 1962 & 2013 did Americans have the highest rate of saving? • 1962 • 1975 • 1983 • 1991 • 2000 7

8. Personal Savings Rate1962-2013 • May 1975 • 14.6% 8

9. 2014 • As of January • 3.9% 9 9

10. $avingTechnique$used by$uccesful$avers 10 10

11. Make savings automatic Technique #1

12. Automatic deposits Arrange for monthly automatic deposits from paychecks or checking to savings accounts for an emergency fund

13. Don’t have to think about it every payday Can adjust/change as needed Benefit!! 13

14. Save for Retirement • Arrange for automatic contributions to retirement plan: • tax deferred • (401k) (403b) (457)

15. Tax Deferred Plan Limits (401k, 403b, 457) $17,500 – 2014 Catch up if age 50 & older $5,500

16. Some plans offer loans foremergencies Borrow if really, really, really needed Benefit!!

17. Penalty if withdraw before age 59 ½ Less likely to make withdrawal Penalty!!

18. IRAs $5,500 yearly Catch-up amount if age 50 & older $1,000

19. Boost Saving by 1% More & have more at retirement Assuming 8% rate of return; Pay Increases 3%

20. Boost Saving by 1% More & have more at retirement Assuming 8% rate of return; Pay Increases 3%

21. Technique #2 Once a loan is paid Pretend you are still making payments Place former payment in savings

22. Benefit!! Already altered lifestyle so you can make loan payments A reallocation of payment to savings can be made without “sacrifice”

23. Technique #3 Put 2014 state/federal tax refund into savings

24. Tax Refund A tax refund is not a “bonus” it’s a refund of your money that can become savings

25. Benefit!! It’s money you have already “adapted” to being without during the year

26. Technique #4 Open an MSA Montana Income tax “savings” $207 if taxable income above $16,700 $414 for married couple

27. Benefit!! Saving tax money on medical expenses you have anyway

28. Question: What percent of Montanans have MSAs? • 1.4% • 25.2% • 53.6% • 70.3% • 92.5% 28 28

29. Percent of Montanans with MSAs • Only 1.4%% 29 29

30. Technique #5 • Utilize creativity for saving… Techniques used by Montanans

31. Piggy Bank Your Extra Coins • U. S. Treasury says Americans hold $15 billion in loose change

32. Sock it away • Eastern Montana mother • Filled-up old socks with loose change & hid in the closet

33. 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

34. 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…..

35. Nothing Week Central Montana Family saves money that would have spent on activities that cost

36. Sugar Bowl Woman on the high-line who squirreled away cash in sugar bowl at the top of the kitchen cabinet

37. Under the mattress Grandpa in central Montana who hid money in envelope under his mattress

38. Save lunch money Parents in northwest Montana packed lunches & totaled their savings

39. Coupon Southeast Montana woman who saved money that would have spent without using coupon

40. Technique #6 Kick habits that cost $$$$$$

41. Money Saved if not spent on Everyday Items

42. Technique #7 • Accelerate debt repayment so have money to save 42

43. Priority Pay off highest interest rate debt first to save on interest Which to accelerate?

44. PowerPay Web site(Utah State University-Extension) https://powerpay.org 44

45. Without Power Payments(Highest Interest First) 45

46. With Power Payments(Highest Interest First) 46

47. Bottom Line Benefits (Highest Interest First) • Time to Pay off Reduced by: • 6 years • Amount Saved in Interest: • $6,314.92

48. 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

49. Kick the minimum payment habit on credit cards!!!!! Technique #8

50. Credit Card Smarts Calculator