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Ladies, want to start saving, but aren’t sure how to start or are you concerned that socking away a few bucks a month won’t really make a difference?
Consider this: if you start a saving account with just $70 and deposit $70 a month, earning 3.5% interest compounded monthly, in 25 years, you’d have $33667.44. That’s money that can be used for a very rainy day, retirement, or to keep as a cushion.
That’s the point that panelist at the Women and Wealth Workshop wanted to drive home and challenged the audience to make saving a priority.
Since saving can be daunting, Suzanne Mayo-Theus, director of the Washington D.C.-based organization Black America Saves, tried to make it a little less painful. She suggested starting during America Saves Week, which runs Feb. 22- March 1.
“We are trying to come up with a plan for women first. We want to start with the sisters to build a movement about saving,” she said. “Take an assessment of your savings, build wealth, and get out of debt.”
For several decades, Mayo-Theus has been saving $25 every pay period since she graduated from college. The money will go towards her dream of donating $1 million to Grambling State University, her alma mater. She asked everyone to encourage their family and friend network to start saving as well.
It is particularly important for people to begin saving as early as possible. “Begin saving at age 18 or 20 and when you’re 45 you will be amazed,” said Keesa Schreane of Schreane & Associates, a media, marketing company with expertise in finance.
Wendy Edwards, an agent for New York Life Insurance Co. noted that there can be an investing component to your insurance as well. “While you are young and in very good health get insurance,” said Edwards advising that the premium that you sign into when you’re young will not increase as you age, while that same insurance purchased at an older age will require a higher premium.
If saving seems impractical the panelists said that by taking an assessment of their income women can identify areas where spending can be cut back. Contributing pre-tax dollars to a 401K plan is an easy and simple way to save because people don’t usually miss the money being deducted from their paychecks, Edwards explained. Plus, there can be an added advantage if an employer offers a matching program. Finally, if savings goals still seem unattainable, then consider adding another source of income.
The workshop was part of the 12th Annual Rainbow PUSH Wall Street Project Economic Summit, which ends Friday in New York.