WTDirect Finds Savers Are Sticking to Savings Strategy During Economic Turbulence
A recent survey from online savings account provider WTDirect shows that Americans who are saving feel confident about their financial health regardless of changes in the economy. Those polled plan to stick with their current savings strategy. WTDirect offers successful saving tips to inspire all who want to be prepared for economic uncertainties.
Baltimore, MD (PRWEB) September 13, 2007 -- Ongoing stock market fluctuation may cause some investors to take a cautionary approach. However, the market's recent pullback can be viewed as typical, particularly when a market has been riding high for so long. In fact, historic data for the past 65 years shows the stock market experiences a down year approximately one out of every four. Therefore, how can savers best prepare to succeed in a volatile market? Not surprisingly, those savers with a strong plan in place feel best prepared to weather any financial situation. This is supported by a recent survey conducted by online savings account provider WTDirect, a division of Wilmington Trust FSB and part of the Wilmington Trust family of companies. The survey found that many savers are confident about their finances and plan to stick with their current savings strategy.
The WTDirect Saver Confidence Survey, performed by market intelligence firm BIGresearch, polled 1,000 Americans who have been actively saving money in 2007. The survey found that 77 percent of respondents intend to follow their current savings strategy. Moreover, 80 percent of these savers have a strategy in place and reported being equally or more confident about their financial health this year as compared to last.
"We applaud these consumers for having a savings strategy, which is the first step towards a sound financial future," said Rebecca DePorte, senior vice president of Personal Financial Services, Wilmington Trust FSB. "They have established savings plans that take into account both short- and long-term goals, which are a good formula for handling the ups and downs. These savers are confident and calm, and ready for the future. This type of positive savings behavior and preparedness is something all savers can emulate."
WTDirect points out additional tips adopted by successful savers that can help any investor feel confident during market cycles:
The biggest challenge is getting started. Make it easy to save by bypassing your wallet entirely. Consider an automatic savings plan or direct deposit of your paycheck into a savings account so money isn't easily spent. This strategy makes saving an effortless, habitual behavior.
Define your goals. Make sure your financial plan allows you to save for both short-term and long-term goals and that you are choosing the appropriate savings vehicle for these goals. The majority of savers in the survey reported savings accounts and 401(k) plans as their top savings vehicles. A savings account is ideal as an emergency cash fund or for short-term goals as it can be easily accessed without penalty. In contrast, retirement money might be saved in a product with less emphasis on liquidity and more emphasis on staying ahead of inflation and the possibility of earning a greater return over the long run.
Protect your short-term funds. For short-term funds, make sure your money is safe in a FDIC-insured account that provides ready access with no fees or penalties for withdrawal. WTDirect offers this type of savings account, and it allows clients to take 60 days to build their balances to $10,000 in order to enjoy the highest rate offered, currently at 5.26% APY.
Invest for the long term. As part of a long-term strategy, diversify and invest over time. Diversifying assets will better prepare you to handle a downturn in the market. Round out higher-risk investments with those carrying lower risk. Take advantage of dollar cost averaging by investing small sums at set intervals over time. This doesn't guarantee positive returns or prevent losses in declining markets, but it can help minimize risk by evening out purchases made at relatively high or low prices when the market is volatile.
Resist temptation. Regardless of economic ups and downs, do not treat your retirement savings plan like a liquid savings account. This money isn't supposed to be touched until retirement age and there are steep penalties for early withdrawal. Be willing to let some longer-term investments ride out the ups and downs of market cycles.
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