Financial Wellness: Your Vision and Your Savings Part 1
Your life vision informs your savings plans and your savings supports your daily life and life vision.
I wonder if you consider yourself a savings kind of person. Did you have a piggy bank as a kid? Or a jar where you saved your change? Maybe, like me, you still do. As a kid, did someone in your family take you to the bank to open your first savings account? What impact did this have on you? I don't remember who took me, but I remember the thrill of the little bank book stamped with my first deposit (yes, that was a long time ago!).
How do you feel about your current savings? Sadly, many Americans do not have sufficient retirement funds or savings. According to one study, in 2016, half of Americans age 56 to 61 have less than 21,000 in retirement savings. And, with the advent of Covid, many of us have either lost our jobs, closed our business, or decided to retire earlier than planned.
A 2019 study states that 64% of Americans will retire with less than $10,000.00 retirement savings. Those surveyed attributed this to either not making enough to save, struggling to pay basic living expenses, or having to pay down accumulated debt.
Financial Resilience & Savings
Do you have a savings plan? Are your saving funds regularly? I hope so! Our foundation of financial wellness depends on harmony between income, spending, and savings. Planned savings cover planned and unplanned (stuff happens!) expenses so that you don't have to reach for the credit card when your car breaks down, for example. You can draw on your Daily Life Savings account to cover these type of expenses.
The second savings everyone should build is what I call Resilience savings (often called Rainy Day, Emergency, or Income Replacement savings). Resilience Savings provides you a healthy cushion equal to three to twelve months of your income in case you are out of work for any reason. For many of us, staying home during Covid is an extreme example of this but in the best of worlds, a Resilience Savings could allow you to take time off to travel, take a sabbatical, or to create a new career for yourself.
Create Your Savings Plan
As a Life Resilience and Financial Wellness coach my work is to offer ideas, map out possibilities, inspire you to make a plan for yourself, and encourage you to take action. I can help you create a holistic spending plan that includes regular contributions to your savings to support your vision and goals.
The two foundational types of savings are our Daily Life Savings (our periodic expenses plus our ongoing needs) and Resilience Savings.
For long-term Investment Savings, your workplace likely contributes to your retirement fund and you may contribute an additional amount. You may already have or want to create an investment account for your kids' college tuition.
A Big Expense Savings for things like a car purchase or down payment on a home could be part of your Resilience Savings or you could maximize these savings in an investment account with good earning potential. Your accountant and financial advisor are ideal advisors to help you with these decisions and suggest ideal strategies for you.
In future articles, I'll explain more about each of these kinds of savings along with some ideas about how you can engage them to create financial wellness and resilience and help your realize your vision.
From my heart to yours, Suzanne Sky - Life Resilience & Financial Wellness Coach
I'm a Life Resilience Coach specializing in financial wellness and resilience. I offer a heart-centered approach along with practical skills to help transform financial worry, anxiety, and stress into clarity, creativity, and a positive relationship with money.
I offer a free 30-minute Connection Session to discuss the possibility of us working together. I'd love to meet you! Contact me for a free Connection Session here.