Are you one of the Americans who are in the dark?
If you want to achieve big financial goals, saving money is essential. It’s also important to know that you can cover unforeseen expenses without having to borrow.
Unfortunately, many Americans have saved too little. And surprising data from North-West Mutual shows a possible reason: a lot of people don’t track their progress. In fact, 36% of Americans don’t even know how much they’ve saved.
And this is a big problem for several reasons.
Here’s why you need to know how much you’ve saved
If you’re one of the many Americans who don’t know what they have in their savings, there are two big problems:
- It’s impossible to know if you’re on track with your savings goals if you don’t know how much you have.
- You might not be maximizing your savings if you don’t know how much money is in different types of accounts.
There are a number of savings goals that almost everyone should set for themselves. These include saving for retirement and building an emergency fund with enough cash to cover three to six months of living expenses. You may also have other things you should be saving for. If you’re planning to buy a home, do some big shopping, or go on an expensive vacation, you should be saving money well in advance. This way, you can do these things while avoiding debt.
If you don’t know how much you’ve saved, you’ll have a harder time meeting these goals. How much you have already set aside determines how aggressive you have to be to save for later years or set aside emergency money. If you have $ 0 in emergency savings, this obviously needs to be your top priority. Or maybe you hope to buy a house within five years and are currently saving $ 5,000. This will determine how much you need to budget each month to make sure you have enough down payment when the time comes.
If you keep an eye on your savings, you will be able to determine if you are on the right track to achieving your goals and, if not, what you need to do to achieve them. You can’t make those kinds of decisions if you don’t know how much you have in the bank.
You will also be able to distribute your money wisely if you know how much you have. You’ll want to make sure you have emergency savings in an easily accessible high yield savings account. It’s also a good idea to keep the money you need over the next two to five years in your savings account. But once you have enough short-term savings, you might want to invest part of your funds so that you can get a better return. If you don’t know your total savings balance, it will be difficult to determine when you should invest.
How to calculate how much you have saved
The good news is, it’s not hard to know how much you’ve saved. So if you’re among the 36% of Americans who don’t know this number, you don’t have to stay in the dark.
Just log into each of your online bank and brokerage accounts and count the numbers. And to make your life easier in the future, you can link your accounts to a app like Mint which automatically extracts data from each account. This way, you can always keep track of your total savings without having to manually check all of your accounts.
Keeping an eye on your savings gives you more control over your money. And I hope you can make better choices about how much to save – and where to put your savings – in the future.