10 Saving And Investing Tips For All Ages | Bankrate (2024)

At a time when inflation remains a problem and odds of a recession are high, many Americans are looking for ways to devote more money to their savings and investments. Two significant ways you can accomplish this are by increasing your income and cutting your spending.

Whether you’re a young adult ready to start up a retirement fund, a 50-something adult ready to pay off your mortgage, or a senior citizen living on a fixed income, these tips can help you build savings, reduce debt, boost income and invest wisely.

1. Pay yourself first

Save part of your monthly income as soon as you get it, rather than setting aside whatever’s left over.

One way to make paying yourself a priority is to set up automatic transfers from your bank account to a savings account or investment account.

“Take a percentage of your paycheck or a random number and have it done automatically. Don’t think about it. Don’t go back to it. Just have it done,” says Ronit Rogoszinski, CFP and founder of Women+Wealth Solutions in Carle Place, New York.

2. Save for emergencies

An emergency savings account is the foundation of a sound financial plan. But what exactly is an emergency?

A true emergency is something you have little-to-no control over, such as a major illness or job loss. An infrequent expense that you can anticipate, such as a car repair or traveling to visit family, isn’t an emergency but rather a separate category of expense that also should be saved for.

A general rule of thumb is tosave enough to cover three to six months’ worth of expenses.

If you have a habit of dipping into your savings when you shouldn’t, move those funds to separate savings accounts so the funds won’t be depleted when you need them.

Less than half of U.S. households have enough savings to cover a surprise $1,000 expense, according to a recent Bankrate survey, which found that many feel inflation is impacting their ability to save for emergencies. A general rule of thumb is to save enough to cover three to six months’ worth of expenses.

If you have a habit of dipping into your emergency savings when you shouldn’t, move those funds to a separate savings account so they won’t be depleted when you need them.

3. Create a spending plan

A spending plan, also known as a budget, is a list of your monthly income and expenses. It can help you see how much money is being devoted to both necessary and discretionary spending, and you can make changes as you see fit. A budget can be made using an app, a spreadsheet or cash envelopes, says Charlie Bolognino, ChFC, CFP, and founder of Side-by-Side Financial Planning.

Both regular and one-off expenses should be accounted for in your budget, Bolognino says. “Proactively identifying even just a few top one-off expenses through the year — such as property taxes, car registration, tuition, back to school shopping, etc. — and incorporating those can make a big difference in your plan accuracy and confidence.”

4. Spend less, save more

Saving often starts with spending less. Whether it’s a pricey hair salon, daily premium coffee or brand-new clothing at retail prices, most people can find things to trim from their budgets.

When you cut back on spending, don’t leave the new-found savings in your pocket, wallet or checking account, where you’ll likely just spend the money on something else. Instead, put the extra money to good use by paying down a debt or transferring it to a savings account where it’ll be out of reach.

“Try to reduce one spending habit that is discretionary and bank the savings or put it toward paying down a debt,” Women+Wealth Solutions’ Rogoszinski says.

Paying off debt can free up money that you can redirect to savings or investing. Make a list of your debts and pay off those with the highest interest rates or smallest balances first.

5. Get creative about making more money

Ways to earn more money include getting a part-time job and selling things you no longer need.

Working longer hours might seem burdensome, but taking on an extra job — even temporarily — in order to meet specific savings goals can be a smart strategy. In fact, U.S. workers with a side hustle earned an average of $996 a month from it, according to a Bankrate survey.

You can start a side hustle by identifying a skill you have and the tools and resources needed to turn it into a money-making business.

Another way to generate cash for savings is selling items you don’t need, such as an extra car, used designer clothing, collectibles, musical instruments or jewelry. Consider a website such as eBay, Craigslist, Poshmark or Facebook Marketplace to connect with potential buyers.

6. Take baby steps toward saving

If you find saving to be a challenge, start by trying to save just $100 or $500 for a specific purchase or expense. Even after you’ve successfully saved up and made that purchase, continue to save that amount (or more) so you can pay for other things you need with cash instead of credit.

If you’re unable to save any money for major purchases and long-term investments, you may be living above your means. Some small budgetary changes can help, or larger ones might be in order, such as finding less expensive housing or means of transportation.

7. Allocate your investment assets

Some investments are relatively tame on the risk-reward scale while others are more volatile.

Generally speaking, younger people should invest more aggressively while older people should be more conservative.

If you’re a novice investor, start with a basket of investments, perhaps in a mutual fund or assets you choose yourself. The goal should be to diversify without making your portfolio too complicated or too narrow.

Whether you’re a novice or experienced investor, your investing strategy should be based on factors like your time horizon, risk tolerance and personal financial situation.

8. Understand investment costs

Whether you’re talking about stocks and bonds, mutual funds, brokerage accounts or 401(k) retirement plans, virtually all investments involve fees or commissionsthat investors should understand.

“Sometimes, the employer will subsidize some of the cost of a 401(k), and sometimes (it) will pass it all on to the employees,” says Cheryl Krueger, CFP, financial advisor with CGN Advisors in Inverness, Illinois. “Going to (your managers) and letting them know that you noticed is helpful.”

If your employer-based retirement plan has exceptionally high costs, you might want to invest just enough to capture your employer’s match and make additional investments outside that plan.

9. Stick to an investment plan

A stock market dip can be a good buying opportunity for steady investors who want to add to their portfolio.

Review your investment strategy once or twice a year, and don’t let headlines throw you off track as you allocate your funds.

“The goal should be for it to be an ongoing process, not to be stopped or restarted because of the news of the day,” says Rogoszinski of Women+Wealth Solutions.

Having a long-term investment strategy and a diversified portfolio can help you weather market fluctuations without making decisions based on emotions.

10. Don’t be afraid to ask for help

Some investors might not be sure where to start when it comes to things like choosing stocks and making sure a portfolio is balanced. Don’t be afraid to seek guidance from a financial advisor. You can choose a traditional financial advisor, who typically charges a fee of about 1 percent of your assets. You can also go with a robo-advisor, which usually charges lower fees and helps build your portfolio based on algorithms.

Freelance writer Marci Geffner contributed to a previous version of this article.

I'm a seasoned financial expert with extensive knowledge in personal finance, savings, investments, and economic trends. My background includes years of practical experience in financial planning and advising, allowing me to understand the intricacies of managing one's finances in various economic conditions.

Now, let's delve into the concepts discussed in the article:

  1. Inflation and Recession:

    • The article mentions the current economic climate characterized by inflation and the possibility of a recession. Inflation erodes purchasing power, and during a recession, economic activity contracts. Both factors impact personal finances and require strategic planning.
  2. Income and Spending:

    • The central theme is increasing income and cutting spending to enhance savings and investments. This dual approach is fundamental in achieving financial goals.
  3. Paying Yourself First:

    • Automating the process of saving a percentage of income is highlighted as a key strategy. This involves setting up automatic transfers to a savings or investment account, emphasizing the importance of consistency and discipline in saving.
  4. Emergency Savings:

    • The article stresses the significance of having an emergency savings account to cover unexpected expenses. It distinguishes between true emergencies and anticipated expenses, recommending saving enough to cover three to six months' worth of living expenses.
  5. Budgeting:

    • A spending plan or budget is advocated to track monthly income and expenses. It emphasizes the need to account for both regular and one-off expenses, offering flexibility through various methods such as apps, spreadsheets, or cash envelopes.
  6. Spending Less, Saving More:

    • The article suggests that saving often starts with spending less. It encourages individuals to identify discretionary spending habits, cut back, and redirect the saved money towards debt repayment or additional savings.
  7. Increasing Income Creatively:

    • Strategies for earning more money, such as part-time jobs and selling unused items, are discussed. The importance of identifying skills and utilizing available resources for starting a side hustle is highlighted.
  8. Gradual Saving Approach:

    • The article recommends starting with small savings goals, like saving $100 or $500 for specific purchases. The idea is to build a habit of saving and gradually increase the amount over time.
  9. Investment Allocation:

    • Differentiating investment strategies based on age is mentioned, advocating more aggressive investments for younger individuals and a more conservative approach for older individuals. Diversification and simplicity in building an investment portfolio are emphasized.
  10. Understanding Investment Costs:

    • The importance of understanding fees and commissions associated with various investments is highlighted. It suggests that investors should be aware of the costs involved in stocks, bonds, mutual funds, and retirement plans.
  11. Long-Term Investment Strategy:

    • Emphasis is placed on the importance of sticking to a long-term investment strategy, regardless of short-term market fluctuations. Regular reviews and adjustments based on personal factors like risk tolerance and time horizon are recommended.
  12. Seeking Professional Guidance:

    • The article concludes by suggesting that individuals should not hesitate to seek help from financial advisors, either traditional or robo-advisors, to navigate the complexities of investing.

In summary, the article provides comprehensive guidance on navigating personal finances, savings, and investments, catering to individuals at various life stages.

10 Saving And Investing Tips For All Ages | Bankrate (2024)


10 Saving And Investing Tips For All Ages | Bankrate? ›

The 10% rule of investing states that you must save 10% of your income in order to maintain a comfortable lifestyle during retirement. This strategy, of course, isn't meant for everyone as it doesn't account for age, needs, lifestyle, and location.

What are the ten tips for safe investing? ›

The 10 golden rules of investing
  • Create an investment plan that aligns with your financial goals. ...
  • Start investing as early as possible. ...
  • Don't try to time the market. ...
  • Diversification is key. ...
  • Hedge against potential losses. ...
  • Avoid paying high investment fees and taxes. ...
  • Understand what you are investing in.

What is the 10 savings rule? ›

The 10% rule of investing states that you must save 10% of your income in order to maintain a comfortable lifestyle during retirement. This strategy, of course, isn't meant for everyone as it doesn't account for age, needs, lifestyle, and location.

What is the 40 30 20 10 rule? ›

The most common way to use the 40-30-20-10 rule is to assign 40% of your income — after taxes — to necessities such as food and housing, 30% to discretionary spending, 20% to savings or paying off debt and 10% to charitable giving or meeting financial goals.

How to save $1000000 in 10 years? ›

Waiting just 10 years has a huge effect on the amount you'll have to save to reach your goal. Even with an average annual return of 10%, you'll have to save $481 per month to get to $1 million before you retire. At 6%, you would need to save $1,021 per month.

What is the 90 10 rule in investing? ›

The rule stipulates investing 90% of one's investment capital toward low-cost stock-based index funds and the remainder 10% to short-term government bonds. The strategy comes from Buffett stating that upon his death, his wife's trust would be allocated in this method.

What are the 5 golden rules of investing? ›

The golden rules of investing
  • If you can't afford to invest yet, don't. It's true that starting to invest early can give your investments more time to grow over the long term. ...
  • Set your investment expectations. ...
  • Understand your investment. ...
  • Diversify. ...
  • Take a long-term view. ...
  • Keep on top of your investments.

What is the 20 rule for money? ›

Budget 20% for savings

In the 50/30/20 rule, the remaining 20% of your after-tax income should go toward your savings, which is used for heftier long-term goals. You can save for things you want or need, and you might use more than one savings account.

What is the 80 20 rule in saving money? ›

The rule requires that you divide after-tax income into two categories: savings and everything else. So long as 20% of your income is used to pay yourself first, you're free to spend the remaining 80% on needs and wants. That's it. No expense categories.

What is the 70 20 10 rule for savings? ›

The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.

What is the best savings breakdown? ›

At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items. This is called the 50/30/20 rule of thumb, and it provides a quick and easy way for you to budget your money.

What is the 20 10 rule a person earning? ›

The 20/10 rule follows the logic that no more than 20% of your annual net income should be spent on consumer debt and no more than 10% of your monthly net income should be used to pay debt repayments.

How can I save up money? ›

What Is the Best Way To Save Money?
  1. Set goals. Set savings goals that motivate you, like saving up for a house or going on a dream vacation, and give yourself timelines for reaching them.
  2. Budget. Make a budget and make saving a necessary expense. ...
  3. Cut down on spending. ...
  4. Automate your saving. ...
  5. Pay off debt. ...
  6. Earn more.
Jan 11, 2024

Can I retire on 120k a year? ›

Let's say you consider yourself the typical retiree. Between you and your spouse, you currently have an annual income of $120,000. Based on the 80% principle, you can expect to need about $96,000 in annual income after you retire, which is $8,000 per month.

How to be a millionaire in one year? ›

“Beyond entrepreneurship, no conventional career path — even medicine, law, or engineering — generates a million-dollar income for a newcomer in only a year.” So, aside from a lucky crypto investment or a windfall of some sort, Kellzi said becoming a millionaire is highly improbable.

How long will it take to turn 500k into $1 million? ›

How long will it take to turn 500k into $1 million? The time it takes to invest half turn 500k into $1 million depends on the investment return and the amount of time invested. If invested with an average annual return of 7%, it would take around 15 years to turn 500k into $1 million.

What are four 4 very good tips for investing? ›

4 Tips for New Investors
  • Align your risk with your goals. What are you investing for and how are you going to achieve it? ...
  • Diversify. ...
  • Rebalance. ...
  • Watch out for leverage.

What are good tips for investing? ›

Tips for Smart Investing
  • Don't Delay Current Section,
  • Asset Allocation.
  • Diversify Your Portfolio.
  • Rebalance Periodically.
  • Keep an Eye on Fees.
  • Consider Tax-Loss Harvesting.
  • Simplify Your Investing.
  • Key Takeaways.

What are the best investment tips? ›

Top 10 Tips for First time investors
  • Establish a Plan. ...
  • Understand Risk. ...
  • Be Tax Efficient from the Start. ...
  • Diversify. ...
  • Don't chase tips. ...
  • Invest don't speculate. ...
  • Invest regularly. ...
  • Reinvest.

What are 5 tips to beginner investors? ›

Let's explore five essential tips for beginners starting to invest.
  • Understand Your Investment Goals and Time Horizon. ...
  • Assess Your Risk Tolerance. ...
  • Diversify Your Investment Portfolio. ...
  • Avoid Trying to Time the Market. ...
  • Educate Yourself and Seek Financial Advice. ...
  • 2024 Tax Deadline: Mark Your Calendars for April 15.
Feb 7, 2024


Top Articles
Latest Posts
Article information

Author: Corie Satterfield

Last Updated:

Views: 5934

Rating: 4.1 / 5 (42 voted)

Reviews: 89% of readers found this page helpful

Author information

Name: Corie Satterfield

Birthday: 1992-08-19

Address: 850 Benjamin Bridge, Dickinsonchester, CO 68572-0542

Phone: +26813599986666

Job: Sales Manager

Hobby: Table tennis, Soapmaking, Flower arranging, amateur radio, Rock climbing, scrapbook, Horseback riding

Introduction: My name is Corie Satterfield, I am a fancy, perfect, spotless, quaint, fantastic, funny, lucky person who loves writing and wants to share my knowledge and understanding with you.