View Mobile Site

Ask the Expert

Signal Photos


Oscar Dominguez: Start saving while paying your bills


Posted: January 21, 2009 9:15 p.m.
Updated: January 22, 2009 4:55 a.m.
As tough times abound in this economy, many of our Santa Clarita Valley bankers are hearing this familiar question: "How can I start saving if most of my money goes toward bills?"

This concern is indeed echoing on a national scale.

According to a recent study by Harris Interactive® on behalf of Union Bank, fiscal fitness such as saving and paying off debt is a 2009 priority for much of the country's adults age 18 and older.

However, few appear to be utilizing the most basic strategies, such as a savings plan.

Nearly 72 percent of Americans age 34-55 believe they do not have enough money saved in the proper accounts to make it through the next year.

Financial decisions made today will determine financial futures to come, and most Americans need more guidance to make informed choices regarding their money.

Consider these fiscal fitness tips to jump-start your savings plan:

* Identify where your money is going. Keep track of your spending habits with a disciplined record of where your income is allocated. It's important to make the distinction between wants and needs-rent, transportation and groceries-and cut out the extras. 

* Write it down. After taking careful inventory of your monthly income and expenses and determining what extras to trim, establish a budget with a clear savings goal. Keeping a written financial plan is a key tool in reaching fiscal goals. Research by the Consumer Federation of America has shown that adults who commit their plan to paper have twice as much savings and investments than those without written goals.

* Make saving a top priority. Rather than paying bills and then working with the leftovers at the end of the month, consider reversing the order. First, deposit a small percentage of your net income into a savings account. Then, use the residual income to address debts and ongoing bills for your true needs (not wants).
 With this new approach, you will force yourself to adapt to less disposable income and spend less.

* Set it and forget it. An easy way to make your savings account the top priority is to enroll in direct deposit with your bank. You can make arrangements with your payroll department to send a designated amount to your savings account and the remainder of your income to your checking account through direct deposit. This will reinforce your commitment not to touch any money in your savings account. 

* Review your investments. A comprehensive review of your investments by a registered investment advisor is key to understanding all the angles of your financial picture. Make sure your portfolio is balanced and diversified by taking a long-term perspective on market positions.

* Keep your retirement needs in mind. When establishing your savings plan, be sure to estimate your retirement needs. Keep incidentals like retirement hobbies and travel in mind. Meeting with a registered advisor to properly assess your overall fiscal health and seeking suggestions on money-saving programs is key.

By creating a savings plan, you'll be better prepared to handle the possibility of changing finances in a volatile economy, providing a cushion for unexpected expenses and ideally, be in a strong financial position when you retire.

Remember, striking a balance between instant and delayed gratification is key to facilitating your future financial success.

Oscar Dominguez is vice president and branch manager of the Stevenson Ranch and Newhall branches of Union Bank. His column reflects his own views and not necessarily those of The Signal.


Most Popular Articles

There are no articles at this time.
Commenting not available.
Commenting is not available.


Powered By
Morris Technology
Please wait ...