Want money for tomorrow? Starting saving today! Those words are so true! The money you save today will be the money you can spend tomorrow.
How I learned the Hard Way
While growing up, the old folks in my family and church told me to save my money in a bank. I listened and kept my money. When I was about 18, I talked with my mom about saving and not having enough money to spend on stuff I wanted. This is when she shared her financial philosophy. ‘If your bills are paid, and you have some leftover money, spend it if you want to’.
I, being I, took that advice and used it. Now, with my Spender ways, I have very little savings. Don’t be like me and spend all the money you have! Always save some.
Want to know how to save and how much? Keep reading!
Three quick ways to save money
Savings Account
I’ve had a lot of savings accounts over the years, and they are an excellent way to save money, especially if you need to get to your money in a hurry.
When opening a savings account, look for an account that will give you interest. Interest is money you earn by keeping your money in the bank, and then it is added to your account. So it’s like earning free money. It won’t be alot, but it’s something and will help your account to grow.
If you can’t find one that offers interest, that’s fine. The main task is finding somewhere safe to stash your money.
Also, be aware of all charges, mininum monthly balance, and monthly fees, These processes will take money away from your account. Here is a quick explanation of each.
Fees–charges for anything. Additional check, money orders, stop check payments. Anything. Example: Your bank account gives you a certain amout of checks to write for each month. If you go over that month, you will be charged for each additional check you write for that month.
Mininum monthy balance–the amount the your account cannot drop below. If it does, you will have to pay a penalty.
Monthy fee–amount charge for having an account with that bank.
Read the savings account features of each bank you’re interested in. You want to ensure you are going with a bank you trust and getting the kind of savings account you want.
Certificates of Deposit (CDs)
CDs are an excellent way to lock up money for months or years. It works by opening one for a certain amount to keep for a certain amount of time. While your money is in the account, it earns interest. When you’re ready to cash in your CD, you’ll be paid the original amount plus the interest earned.
A CD can have a time frame of 3 months to 10 years. Some banks and credit unions have CD terms for longer than that. Some places require a certain amount to open a CD. Please pay attention to the features of each CD.
Retirement Accounts (Roth IRA and Traditional IRA)
Roths and IRAs are great ways to save, but they are usually for the long-term such as for retirement. I don’t know too much about them, but the company Charles Schwab is one of the big boys when it comes to retirement and savings.
My advice is before getting involved in retirement accounts, educate yourself or speak to a professional. It’s best to know what you are getting into.
How much money to save
I heard somewhere that 20% is a good amount of each paycheck to save.
The takeaway
The money that you make is your money. You earned it. Enjoy it, but don’t go overboard.
It’s a good practice to save about 20% of each paycheck (or as much as possible). It can be stored in a savings account, a CD, or a retirement account to keep it safe.
Remember, if you want money for tomorrow? Start saving today!
Just saying.
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