Check out options to start saving, advisers urge

Many factors, including low interest rates and the Great Recession of 2008, contributed to the lower rates of saving for families across socioeconomic lines.

The lower rates of savings for households hold true whether individuals and families are saving for a rainy day or for retirement, local financial experts said.

“Most folks were severely affected by the Great Recession, and turned to the utilization of credit as a means to sustain the loss in wages and or the (stock) market effect on their retirements savings,” Javier Quintana, an assistant vice president at Canandaigua National Bank & Trust, told El Mensajero Católico in an e-mail. “For the working poor, savings is not top of mind, as they may not feel like they have the disposable income to pay themselves first (before other obligations).”

Amanda Champlin, a financial adviser with Champlin & Associates in Penfield, agreed. Lower-paying jobs and a lack of access to retirement plans also contribute to families being unable to save, since covering their day-to-day expenses is the priority, she said. Some individuals also may lack the knowledge of how to budget and save, Champlin noted.

“There are a lot of options for people to start saving, and their best bet is to meet with someone who can help educate them based on their unique situation and goals,” she said.

Since savings accounts continue to offer low rates of return, people who are employed are putting any extra available funds from their incomes into retirement savings accounts, such as employer-based 401(k)s, Quintana added. Younger employees benefit even more from this option if their employers offer a matching-funds benefit, he noted.

Additionally, individuals who are not near retirement age are turning to other alternatives to earn better rates of returns on investments, such as investing in real estate that appreciates in value, he said.

Latino millennials, however, are slowly starting to shift toward saving more for retirement so they can have a positive impact on their families’ futures, Champlin said.

“In the past, Latinos relied heavily on family as a fall-back when enough money wasn’t saved,” she added.

Savings habits do differ across racial and ethnic lines, according to a 2015 report based on a “Survey of American Family Finances” by the Pew Charitable Trust found.

While a white household had slightly more than one month’s income in liquid savings, Hispanic and black households had 12 and five days’ worth, respectively, according to the report ( The same pattern emerged when looking at racial differences in total financial assets of a household. By liquidating all of its financial accounts, a typical white household could replace almost 10 months of income, while a typical Hispanic household could replace slightly more than one month, and a black household could replace only 23 days. A quarter of black households would have less than $5 if they liquidated all of their financial assets, the report found.

A return to the ideal of having savings set aside in case of emergencies or for goals would be beneficial for many families, Quintana said, regardless of race, ethnicity or income level.

“Not having a savings plan can drastically affect individuals, meaning they may not be ready for retirement, working for more years, and not having the capital to support their current … or future lifestyle,” he said. “Coincidentally, other folks may need to work longer just to keep their health benefits, as the cost of their medication would be too expensive to pay for without health coverage.”

Quintana urges individuals to get started on the savings track by paying themselves first before other obligations as well as investing in retirement plans.

”Set aside rainy-day funds for expenses such as home and automobile repairs,” he said. “Start early and teach the younger generation the importance of savings and not spending every dollar they earn. It’s important for parents to talk to their kids about needs vs. wants, take them to the bank to open a savings account. At this stage it’s not just about the interest earned, but rather the habits of putting funds away.”

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