What’s the Best Way to Start Saving Money for Your Financial Goals?
A lot of people will start saving money when the time is right. Unfortunately the time is never just right. You just have to jump in and commit yourself to saving money. In the beginning you should save a little bit of your income such as 2% or 3% but eventually you want to move this percentage up to 10%.
When you move up gradually you are not as likely to notice the money missing from your pay check. Some people like to jump right in and start saving 10% but if you budget is tight this may not be the best way to start. A tight budget can help to discourage you and discard your savings plan altogether.
Once you get started you will not even miss the money. You don’t want to leave it up to you to save your money. In other words make the process automatic. Set up some type of process where the money is coming out of your pay check automatically. When you start with a new employer the first thing you should do is get an enrollment form so that you can join the retirement program.
Most organizations have a 401k which allows you to invest a portion of your income. You want to make sure it’s a comfortable amount at first. You can always increase the amount later. A 401k program allows you to diversify and have your money going to different segments. You can have high growth or very conservative funds. This is helpful when the economy is on an up and down swing. It helps you from losing all of your money.
You should also list all of your financial goals and then assign deadlines to these goals. Find out how much money you will need to save for each goal. This amount should be broken down by year and by month. As soon as you know the amount needed and the deadline you can calculate the monthly amount needed. Deadlines help you focus and keep you on target. They literally make you take action to fulfill your financial goals.
Always check with your financial adviser to make sure you are on target to hit your goals. At certain points in time you may need to make some adjustments or amendments to your goals. For example your 401k will need adjustments as you get older. More and more of your money will probably go towards a less aggressive fund the closer you get to retirement.
The Best Saving Accounts Out There and Importance of Having One
In today’s unsteady economy, the drastic need for a ‘rainy day’ fund is important for most individuals. By establishing a savings account, this backbone security method will allow ease of mind if something tragic happens within your life. Whether someone loses their job, is unable to work for a long period of time, or has to take care of someone ill, this fund will help steady their finances for a specific period of time.
The best savings accounts available are those that offer reasonable interest rates. Some other of the best savings accounts may offer incentives for saving so much per month, year, etc. Many money market accounts are available with high interest yield to up your savings just because you leave your money alone in your account.
Some of the best savings accounts available include:
Alliance Bank – 5.16% interest rate – Minimum deposit of $5,000
Discover Bank – 5.12% interest rate – Minimum deposit of $2,500
Capital One Bank – 4.88% interest rate – Minimum deposit of $5,000
Allstate Bank – 4.40% interest rate – Minimum deposit of $1,000
Metlife Bank – 4.69% interest rate – Minimum deposit of $1,000
Please note this is just a list of some of the lowest accounts available, bank rates are subject to change.
What does savings help me do?
Take for example, a savings deposit of $1,000 when opening the account, and $50 each week after. After 3 months, you would have $1,600. Most banks pay interest on a quarterly basis. Let’s imagine your interest rate is 5.3%. Your quarterly interest on your $1,600, would be $84.90. After 1 year of keeping the same savings routine, you would yield $4,408.28. That’s only 1 year of savings. This demonstrates how important finding one of the best savings accounts out there is to your financial health.
Saving Accounts 101
A savings account is accounts that is maintained by banks and are easy ways for you to save money without risking losing your money by other means such as fire or robbery.
Why Do You Need a Savings Account?
Many people open savings accounts for saving money. Setting aside a small amount of money into a savings account is a great way to save for a family vacation, a new car, money for college, or money for retirement. No matter what you want to save for, a savings account is a great way to go.
Choosing a Savings Account
When choosing a savings accounts, there are many different things to consider. Some of these things include choosing a bank that has the services that you need and want and comparing interest rates, minimum balance requirements, and fees that may incur during your account’s lifetime.
How to Open a Savings Account
When you are ready to open a savings account, you should choose a bank in your local area to open your account with. Things you will need in order to open your account is proof of your identity. This would be your state driver’s license or identification card, and a social security card. You will have to fill out an application and some banks require a deposit to be made into the account in order for it to be opened. Some savings accounts can be opened for as little as one dollar.
Why is Your Money Safer in a Savings Account?
There are many facts to consider when choosing to put your money in a savings account. You money is much safer in a savings account than if you stick it in a sock and put it in your dresser where if you were robbed or your home burned down it would be lost forever. In a savings account ,your money is insured up to $100,000 through the Federal Deposit Insurance Corporation (FDIC). This simply means that even if a bank goes out of business, you will not lose your money that was in the account. The federal government created the FDIC in the 1920s to make sure that people did not lose their money incase a bank went out of business. This was a huge problem within the Great Depression.
How to Find High Interest Rate CD or Saving Account
When you don’t have money your concern is how to earn it; when you have it you are worried where to keep it. The dumbest idea is to keep the bills at home, but no one wants to take such risk, therefore, one starts looking for reliable banks that pays highest returns.
Ever since the recession hit our economies it is somewhat challenging to find a bank that pays decent interest rates on deposit accounts. But with meticulous search you might be able find a few. Read more
Money Market Accounts: The Best Features and Benefits
With the downturn of the economy we are seeing more and more people starting to save money. There are several instruments you can use to save money depending on what your goals and objectives are. If you want to earn a high rate of return on your money then you may want to consider money market accounts.
With you money market account you are paid a higher rate of interest than you would receive with a saving account. Your money will actually grow a lot faster.
If you choose to open a money market account your will notice that the opening deposit is going to be a lot more than you would need for a savings account. Some banks will require an opening balance of $1,000 or $2,500. With a savings account the opening balance is probably going to be somewhere in the area of $50 to $100.
With a money market account you can write three checks per month even though these are not checking accounts. This is another feature that distinguishes them from savings accounts.
You are limited with the number of transactions that you can perform on a monthly basis with money market accounts. That number is usually around 6 withdrawals per month and some banks will count your 3 checks as three of those transactions. If you go over the allotted number of transactions you could be subject to a fee.
When you open a money market account your money is safe. The FDIC insures your money up to $250,000 per depositor per account. This amount of insurance can be even more when you consider the ownership of the account. If you are not sure about the amount of insurance always check with your bank. The insurance of $250,000 is good through December 31, 2009 after that it will revert back to the original amount of $100,000.
You can also access your money by going to an ATM. Depending on the bank ATM transactions may or may not count towards the number of transactions that you are allowed to perform during the course of a month.
Which Better CD or Account Savings
If you want to start saving money then you may want to consider Certificate of deposits, (CD), or a savings account. They both have advantages and disadvantages so it’s really a matter of want you want to achieve. Before you choose on one or the other it’s a good idea to know all the features and benefits of each.
Opening Deposit
Certificate of deposits require a higher opening deposit than savings accounts. Your deposit can be as much as $500 or $1,000. When you open an account saving the opening deposit is somewhere in the area of $50 to $100 much less. So if you don’t have a lot of money to start then maybe a saving account is going to be your best option.
Term
A certificate of deposit will require you to keep your money on deposit for a fixed term. Terms can range from 3 months to 5 years. When you choose to take your money out of a CD before the term ends or maturity, as it’s called, you will be subject to an early withdrawal penalty which could be costly. If you can do without your money for awhile then you may want to consider a CD. With a savings account you can get your money any time you want.
Interest rate
The interest rate on CD’s is much higher than a savings account. Overtime you will be able to watch your money grow much quicker than it will with a saving account.
Maturity
When your CD matures you must choose what to do. You can take the money out of the account and close it or you can roll your CD over for the same term or a different term.
Higher earnings
If you want to earn more interest with a CD then you may want to open the account for a longer term. The majority of banks will pay you more interest when you take out a CD for a longer period of time. It’s the banks way of paying you for tying your money up for a long time. With a savings account there is nothing you can do to increase your interest rate.
Fixed rate
The interest rate on CD’s is fixed which makes them safe investments. You never have to worry about your interest rate fluctuating up or down. Sometimes when you roll over your CD you may have the opportunity to take advantage of rolling over at a higher interest rate, but it all depends on what the prevailing rates of interest are at the time of rollover.
Saving Money Tips During the Credit Crunch
Saving Money Tips
Saving money is so much easier said than done. There’s a lot more to it than spending less money and that can be challenging. Well below is some realistic ideas to keep your spending in hand.
Well firstly set yourself saving goals. For short -term goals this is easy. If you want to buy a new kettle. Find out how much it costs. If you want to buy a house, find out how much down payment you need. For longer- term goals like retirement, you will need to plan ahead and figure out how much money you will need to live in comfort for at least 20 to 30 years. You will also need to figure out how investments could help you achieve your goal.
Loose your debts first. Calculating how much you are spending each month on your debts will show you that by getting rid of them is the fastest way to free up money. Once this money is freed up you could start saving it.
Establish a time frame for shorter goals, and make sure the goal is achieved with in that time. If its not attained you will just get discouraged.
Find out how much you will have to save each month and keep a record of your expenses. What you save falls into two, how much you make and how much you spend. Since you have control of how much you spend, it is wise to take a serious look at what you are spending. Write it all down for a week or a month. Try not to leave out even the smallest purchase. Keeping a small notebook with you is a good way of recording expenses and receipts.
Take a long hard look after about a month at your spending. You will notice the obvious cuts you need to make like $200 on sweets. Think about your priorities and make cuts you can live with. Calculate the amount these cuts are over a year.
Ask yourself: Can I live in a cheaper house, can I refinance my mortgage?
Could I resolidate my debts so I’m not paying as much interest?
Could I save money on gas or live without a car?
Could I drop a land-line and use a cell phone?
Do I really need satellite or cable TV?
Can I cut down my Utility bills?
Can I stop eating out? Could I cook more at home? Cooking at home is a lot cheaper than eating out.