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Oscar Dominguez: Build yourself a nest egg

Union Bank

Posted: May 29, 2009 8:52 p.m.
Updated: May 30, 2009 4:55 a.m.
 
Whether you would like to set money aside for a down-payment on a home, build an emergency fund or save for retirement, concern about the economy has many thinking about ways to save and create a nest egg for the future. 

According to a recent America Saves Week survey of more than 1,000 adult Americans, 77 percent of respondents said they were “concerned” about the impact of the current recession on their personal finances and more than 53 percent described themselves as “very concerned.”

America Saves Week is a nationwide campaign in which a broad coalition of groups helps individuals and families save and build wealth.

By identifying your savings goals, creating a plan and reviewing it periodically to determine if any modifications are needed, you can start on the road to savings. To jumpstart your plan, consider these tips:

  •  Assess your spending. When creating a savings plan, it is important to make sure you are spending less than you earn. Start by looking at exactly how you spend your money. Carefully track your spending for one or more months to see precisely where your money is going. Many people are surprised to see how the cost of a daily cup of coffee adds up, or the budget effects of regularly dining out.  Once you have a handle on how you are actually spending, it’s easy to identify areas to cut back.  

  • Open a savings account. Establishing a savings account and contributing to it regularly will help promote savings. Almost all financial institutions allow account holders to set up automatic weekly or monthly funds transfers from their checking to their savings account. This method of saving allows savings to grow, even if you don’t take further action, and helps you approach savings as a bill that must be regularly paid.

  • Comparison shop. During these challenging economic times, retailers may lower their prices and offer bargains to draw additional customers. Consider shopping around for deals on products and services, as these bargains could add up to substantial savings.

  • Establish an emergency savings fund. Consider opening a savings fund to cover unexpected expenses. Keeping $500 to $1,000 in an emergency fund allows you pay for unforeseen costs. It allows you to avoid high-cost, short-term loans, which can create a cycle of debt.

  • Diversify. Consider several savings options for your money, such as a regular savings account, CDs and/or money market accounts. Teach family members, including young children, the importance of savings and consider opening a savings account especially for them. Many banks provide savings account options for children and teens.

Oscar Dominguez is vice president and branch manager of the Stevenson Ranch branch of Union Bank, located at 25954 The Old Road and the Valencia Bank & Trust branch, located at 23620 Lyons Avenue.  Visit www.unionbank.com for more information. His column reflects his own views and not necessarily those of The Signal.

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