If you were hit with an unexpected medical bill or expense, where would you get the money from? Could you access 5k in liquid cash within 24 hours?
According to a Bank Rates survey conducted in 2016, 35% of Americans have no savings and no income plan for retirement.
Many experts would attribute this to a huge disconnect in the way we learn about finances from a young age. Financial stability is often viewed as a destination to be achieved at some distant point in the future, rather than a journey that requires daily attention.
We all know we need to save, but do we even understand the fundamental attributes that make up a savings account?
Saving For The Right Reasons
In life, anything can happen. Household repairs, car expenses, job loss, cost of living increase, and relocation were reported as the most common reasons Americans use emergency funds.
However, in many ways, saving for this reason alone is counterproductive. Saving to invest should be the target if the goal is to achieve financial freedom. While it doesn’t help that interest rates have fallen significantly in the last 30 years, the fundamentals of saving money have not changed.
Due to the realities of the current economic climate, employing modern and creative strategies is more important than ever.
A Modernized Approach
Today, technology has infused much-needed innovation to the world of saving and investing. Apps like Acorns, Robinhood, Digit and Capital allow users to round up transactions on their debit cards to the nearest dollar while setting the difference aside in a separate account.
This holistic approach clearly resonates with millennial and gen Z Americans, as each of these platforms has experienced explosive growth over the past 5 years.
Saving has become something Americans can get excited about again, as technology has allowed users to see significant growth in their savings without noticeable change to their quality of life.
Discovering What Is Really Important
Modern tech companies within the finance space seem to have achieved what many of the traditional big boys have failed to do in recent years, which is connect emotionally to the real reasons young people want to save. Gone are the days of marketing using the dream of homeownership and paid off vehicles.
Millennials and Gen Z are saving their money for experiences, achieving recognition, and supporting causes they believe in. Integrating daily saving habits, scaling back on unnecessary expenses, and delaying gratification are all ways we can increase our savings and ultimately achieve a life with freedom and choices.