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.
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.
Saving, Spending & Investing Money
Saving, Spending & Investing Money
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 with SmartyPig
West Bank’s SmartyPig Tries to Make Goal-Based Saving Social, Easy
What do you do when you want a specific item that just doesn’t fit into your existing budget?
You could pull out the plastic. However, those credit card purchases will cost you an arm, a leg and even a few ribs by the time you get done wrestling with the near-usury of their interest rates.
Additionally, far too many of us are learning that our credit limits and our cards’ terms aren’t what they used to be. Card companies have been jacking up rates and killing accounts in response to the economic downturn and pending federal regulations. The “I’ll just charge it” mentality is finally (and smartly) on its way out.
You could save the money. That’s the smart choice. It’s a proven technique that responsible people have been using for centuries. Some people build up cash in coffee cans. Some just try to build up more in their checking or savings accounts.
Those techniques can work, but their not quite as easy as they sound. We tend to fall off the savings wagon unless there’s a great deal of motivation. The failure to make regularly scheduled additions to savings can also make saving tough. When you’re saving by putting money into an existing account it can be hard to tell what’s really available for your purchase and what should stay there.
West Bank thinks they have a solution. They call it SmartyPig and it’s an online savings systems.
SmartyPig allows people to set up savings accounts tied to a specific cash goal. You can set it up to grab money from your other accounts automatically, on schedule to get you to that goal. The FDIC-insured accounts feature nice interest rates that stack up to other high-interest savings programs, too.
SmartyPig accounts don’t allow much flexibility. You can’t withdraw a portion of your account. You either wait until you’ve hit your savings mark or you shut down the account early. There’s no “in between.” If you do close the account, you can’t transfer the funds electronically to your bank, either. You’ll need to wait a few days for West Bank to send you a check.
Tips for Living Off-Campus and Saving Money
How to Move Out of the Dorms and Save Money
Every year college students tell their parents that by moving off campus they will save money. Out on their own for the first time, they soon realize that money is in short supply. Living off campus can be a money saving option if you are prepared and have thought about the ways you will save money. If you plan ahead, you can save money on your housing, living, and entertainment costs.
Housing Costs
* Find Roommates: If you find trustworthy roommates, you can expect large savings on your housing costs.
* Buy Cheap Houses: If your school is located in a depressed real estate market, your parents might be able to help you buy a house as an investment. If you buy, you do not lose your money to a landlord.
* Find out Your Utility Costs: If you are renting an apartment, you should look for an off-campus apartment where the heating costs are included in the rent. There is nothing worse than paying out of the roof to keep your apartment warm and still being cold because moving the thermostat higher will only add to your pricey gas bill. In climates where the weather is extremely cold or hot, you should ask to see an old bill for the apartment or call the utilities company to ask what the average is for your building or former house.
One should not overlook heating costs when looking to move into an old house. Ask to see the bill. Also, you should be sure to ask your landlord what their maintenance practices are on their heating equipment. If they do not regularly change the filter or get it professionally serviced, you heating unit will not work as well and will cost you more each month on the bill.
Living Costs