Smart About Money: Savings Tips


Media reports tend to highlight the tragic reasons why people run through their life savings, usually involving a catastrophic accident or other sadly life-changing event.

Bankers know that those cases are extremely rare. Most of the people we see who have money trouble actually have a much more common problem. Specifically, they spend too much.

No one’s perfect at figuring out when it’s right to say “No!” or “Not now!” to a purchase. And sometimes a splurge is exactly the right thing.

But the main obstacle people have to growing their savings is that too many look at their savings as something to be spent. And soon!

The best thing about getting seriously into the habit of saving is that it gives you “A Positive Reason” to postpone or decide against some spending. You’re not saying no to the purchase. You’re saying “Yes!” to financial freedom.

For many people, saving (and not then spending!) their first $1,000 is the hardest. Having separate accounts definitely helps — one for emergencies, one for planned expenses, and a “Don’t Touch!” long-term account. Computer programs (like Quicken) also help you see where your money is going so you can modify accordingly.

Two other smart ideas:

1. Look for ways to stretch your dollars. Make it a challenge, as you might with exercise or reaching any goal that takes effort over time. Chances are that the early signs you see that you’re going in the right direction will encourage you to keep going.

2. Don’t be influenced by the squanderers out there — people who are making every effort to “keep up with the Joneses.” The Joneses aren’t paying attention. And they’re definitely not worth trading your long-term financial security and independence for.

What about being asked to lend to family or friends — people who know or believe that you have money available? Should you do it? This is a question bankers hear often, and the answer is always the same. It depends.

Major-league sports teams now have financial professionals who help players explain to relatives and friends that — even though the players appear to be “rich” — that money has to last their lifetime after playing, and it’s too much to ask for loans or gifts of cars and houses and other expensive items. Protecting the player’s money for the player is the priority.

The same holds for you. If you’re approached by someone you know for a loan, and if you have any qualms or find yourself making the decision based on emotion at all, take the time to consult with independent advisors — a banker, CPA and/or an attorney — who are trained (and delighted!) to help people make those decisions wisely.

Wisely means that sufficient assets will still be there for you if you need them. And that the loan or the gift — should you choose to go that way — will actually be a good thing for the recipient. And for you!

Nick Maffeo is the senior vice president, chief financial officer and treasurer at the Canton Co-operative Bank in Canton. Have a question? Email to submissions@

Share This Post

Short URL:

avatar Posted by on Apr 14 2011. Filed under Featured Content, Opinion, Smart About Money. Both comments and pings are currently closed.
Canton Citizen Absolute Landscaping

Search Archive

Search by Date
Search by Category
Search with Google
Log in | Copyright Canton Citizen 2011