Your ability to save and invest will determine your financial security in retirement. But for many Americans, saving goals often go unfulfilled. More than one in five adults don’t set aside any income to maximize savings, and many others fall well short of their monthly and annual goals. If you’re struggling to save, a multi-pronged approach may be required to instill strong savings habits and lay out a strategy for sustainable saving. A number of financial planning tools and resources are at your disposal to help you improve your savings efforts and build long-term financial stability.
Here are five financial planning tools and resources to consider as you work to maximize your savings:
1. Your Bank’s Mobile Banking App
Smart money management starts with your bank’s mobile banking app. Mobile and online banking will help you monitor cash flow in your bank account and facilitate fast and easy transfers from your checking into your savings accounts.
By regularly checking your mobile banking app—and setting up notifications for transfers, payments, low balances, fees, and other important updates—you can improve your financial awareness, money management, and ability to plan for the future.
2. Budgeting and Money Management Apps
Before you can reliably save, you need to be able to set and stick to a budget. Many budgeting and money management tools—including Mint, YNAB (You Need a Budget), and Simplifi—integrate with your bank account and monitor all of your transactions and income to track spending by category.
With this budgeting infrastructure, you can dedicate a percentage of your income to savings. Budgeting tools help you consider your savings and investing goals as monthly expenses, rather than an extra goal you might contribute to if you have any leftover funds. This can instill better saving and investing habits, improving your ability to fulfill long-term financial planning goals.
3. 401k Retirement Calculators
How much are your current 401(k) savings and contributions going to be worth at your retirement? A simple 401(k) retirement calculator can project your 401(k)’s value over time based on its current balance, your annual contributions, and your projected rate of return over time.
Bankrate’s 401(k) calculator also lets you factor in employee matching, so you can calculate the value of fully earning your employer’s match every year. (You should take advantage of the full match—it’s essentially free money that goes right into your long-term savings funds.)
With this calculator, you can identify the future value of your current savings rate and test the impact even a modest increase in your 401(k) might have on your net worth over time.
4. Automated Savings Tools
If you want to gamify your saving strategy or supplement existing contributions and schedules, use an automated savings tool. These tools can grow your savings balance without pulling a huge chunk of money out of your checking account.
Mobile apps like Acorns put away small contributions to build up your savings balance. Another option is the mobile app Digit, which analyzes your spending patterns and automates savings contributions based on what it believes you’re able to handle.
Depending on your resolve, your reliance on automated savings tools may vary over time. However, they can be a supplemental tool to build toward small savings goals without detracting from larger savings and investment strategies focused on long-term net worth.
5. Portfolio Analysis Tools:
Investment tools, such as MacroAxis or PortfolioVisualizer, can provide insight into your portfolio’s risk and return metrics. Features can be free, depending on the size of the portfolio. These financial planning tools may be more appropriate for investors with advanced investing experience or strong quantitative backgrounds.
6. A Financial Advisor
Some advisors, like Prudent Investors, will also provide technology to help you better stay on top of your finances as part of their services. These financial planning tools and resources can help you with budgeting, goal planning, major life events (e.g. social security eligibility) and taxation (e.g. RMD distribution reminders). If you’re serious about saving, it pays dividends to work with a trusted professional who can listen to your current goals and struggles, build a strategy for maximizing savings and meeting those goals, and then give you technology to make your finances more productive.
To find out how a financial advisor can improve your financial planning and long-term financial outlook with financial planning tools, request a no-obligation consultation today