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Your Savings: Baby Steps and Big Steps

If you feel socked in the gut about your savings, at least you’re not alone. About 40% of Americans worry that they haven’t put enough away for a rainy day or for their retirement. The tail end of the year doesn’t help matters. Holiday travel and big shopping bills may leave people more jumpy than jolly.

Take heart! Making a few adjustments to your short-term spending—especially holiday plans—can be a great start. For instance, one budget trick is to take out your whole shopping fund in cash. When the green is gone, it’s time to stop. (A single prepaid credit card does the trick, too.) You can also agree to a gift exchange or Secret Santa, where each participant purchases only one gift.

But what about the long term? The smart first step is a big-picture financial review. You should do it once a year. It should cover the following five questions. Read more...▼

1. Are the basics covered? Do you have a will? A retirement account? Life insurance? These are the financial ABCs. If they’re missing, fill in the gaps.

2. Can you picture retirement? Retirement readiness calls for a little math. How much will you need? Get some help from the  Average Retirement Income Calculator.

Tip
Feed your 401(k)! It’s flexible and tax-friendly, and it might bring in additional contributions from your employer.

3. Any big family news?Marriages, divorces, births and deaths all have an impact on financial plans. New parents may want to boost their life insurance. A family loss might mean updating a will or beneficiaries.

4. What’s your job status? The average person holds a job today for about 4.6 years, according to the Bureau of Labor Statistics. If you’ve changed jobs or become unemployed, roll your old employer’s 401(k) into a rollover IRA or Roth IRA. Make sure your life insurance coverage is up-to-date as well.

5. What are you saving for? Plans change, and so do dreams. Is it a bigger house? College for the kids? An annual financial review is a chance to set those savings plans in motion.

Need help with your annual financial review? Allstate is here. The review is a service offered to all policyholders at no cost. Your Allstate Agent can help put you in contact with an Allstate Financial Representative.