National Association of Black National Association of Black Accountants, Inc.Accountants, Inc.

SavingsSavings

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SavingsSavings

What is saving?What is saving?

Money set aside for short Money set aside for short term goalsterm goals

Saving and Investing: The Saving and Investing: The DifferenceDifference

Saving Saving is to put aside or reserveis to put aside or reserve

InvestingInvesting is earning a return on your is earning a return on your moneymoney

Saving GoalsSaving Goals

Pay yourself firstPay yourself first Resolve to spend lessResolve to spend less Create an emergency fundCreate an emergency fund Make saving a priorityMake saving a priority

Saving Your MoneySaving Your MoneyAny good financial plan includes two types of Any good financial plan includes two types of

savings plans:savings plans: A A set-aside accountset-aside account which serves two purposes: which serves two purposes:

1. Providing a safe place to set the money aside that 1. Providing a safe place to set the money aside that you know you will need for future payments.you know you will need for future payments.

2. It makes that money work for you by earning 2. It makes that money work for you by earning interest.interest.

A A “nest egg” account“nest egg” account: savings plan for the : savings plan for the purpose of accumulating the money needed to purpose of accumulating the money needed to achieve your financial goals achieve your financial goals Provides a certain degree of comfort that money will Provides a certain degree of comfort that money will

be available if some unexpected expense should be available if some unexpected expense should occur in the future.occur in the future.

Saving StrategiesSaving Strategies

Start smallStart small Contribute to your retirement planContribute to your retirement plan Save through payroll deduction plansSave through payroll deduction plans Set up an automatic investment planSet up an automatic investment plan Round up your mortgageRound up your mortgage

Saving StrategiesSaving Strategies

Bank your raisesBank your raises Keep paying off a loanKeep paying off a loan Pay off your credit cardsPay off your credit cards Keep track of where the money goesKeep track of where the money goes

Saving for a PurposeSaving for a Purpose

RetirementRetirement EducationEducation Home OwnershipHome Ownership Supplemental IncomeSupplemental Income The “Rainy Day” FundThe “Rainy Day” Fund

Saving OptionsSaving Options Passbook Savings AccountPassbook Savings Account Certificate of Deposit and Certificate of Deposit and Money Market AccountsMoney Market Accounts Mutual Funds and 401(k) Mutual Funds and 401(k) Plans Plans Holiday and Vacation Clubs Holiday and Vacation Clubs

Any successful financial plan includes a Any successful financial plan includes a regular savings plan, no matter how small.regular savings plan, no matter how small.

Getting into the habit of saving is just as Getting into the habit of saving is just as important as how much you save.important as how much you save.

After your financial situation is more After your financial situation is more stable, you will be in the habit of saving. stable, you will be in the habit of saving.

Remember, if you can just find a way to Remember, if you can just find a way to save just $20 per week, every week for a save just $20 per week, every week for a year, you will have saved $1,040 after one year, you will have saved $1,040 after one year!year!

After five years you will have saved $5,200!After five years you will have saved $5,200!

SAVING YOUR MONEYSAVING YOUR MONEY

The amount saved is not as important as The amount saved is not as important as saving on a regular basis! saving on a regular basis!

The more time you have to save, the more The more time you have to save, the more savings you will have at the end of the savings you will have at the end of the time period. time period.

The more income you choose to save, the The more income you choose to save, the more savings you will have at the end of more savings you will have at the end of the time period. the time period.

The higher the interest rate the more The higher the interest rate the more savings you will have at the end of the savings you will have at the end of the time period.time period.

RememberRemember

ActivityActivity

Getting Started with Your Savings Getting Started with Your Savings HabitHabit

(See handout)(See handout)

Final PointFinal Point

Financial literacy isn’t just a matter of knowing what you

have and knowing your options. It is a matter of planning for

life’s milestones.

Financial literacy isn’t just a matter of knowing what you

have and knowing your options. It is a matter of planning for

life’s milestones.

Thank You!Thank You!

National Association of Black National Association of Black Accountants, Inc.Accountants, Inc.

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For more information visit www.nabainc.orgFor more information visit www.nabainc.org

360 Degrees of Financial 360 Degrees of Financial LiteracyLiteracy

360 Degrees of Financial Literacy is a national 360 Degrees of Financial Literacy is a national effort of the CPA profession to improve the effort of the CPA profession to improve the financial understanding of Americans. It financial understanding of Americans. It provides a comprehensive approach to financial provides a comprehensive approach to financial education, focusing on the information education, focusing on the information Americans need at every life stage, from Americans need at every life stage, from childhood to retirement. CPAs volunteer their childhood to retirement. CPAs volunteer their time and expertise to educate members of their time and expertise to educate members of their communities about financial issues.communities about financial issues.

Visit Visit www.360financialliteracy.orgwww.360financialliteracy.org for tools to for tools to help you make sound financial decisions.help you make sound financial decisions.