Many families these days are living paycheck to paycheck many companies have cut back on full-time employees in favor of part-time due to fear about Obamacare. So families are pinching pennies and just scraping by. Saving for the future is the furthest thing from their minds. However, it is still very important for families to save for the future. Here are five important tips for families who are considering taking the first step to saving by opening a savings account. This can be a special savings account just for emergencies like tires or a water heater repair or medical emergencies. It should be separate from your normal checking account so you won’t be tempted to dip into it for movies, or a new big screen TV. Although you could set up a separate fund for that TV as well, if it is a priority.
Tip #1: Just Do It
The first step to saving is to make a conscious decision to do just that; save. Families must examine why this is an important step for them in order to find motivation to do so. Having savings to fall back on can help in the event of a job loss, extra expenses for vehicle problems, unexpected medical bills, and other family emergencies. In fact, finance experts recommended that families should have a minimum of six months of living expenses saved in case of unexpected situations.
Tip #2: Set Savings Goals
When taking on any type of endeavor, whether it is losing weight, going back to school, getting in shape, or opening a savings account, it is best to set a goal. The goal should be easily attainable, or in several attainable steps that add up to one big goal. Setting a large goal and expecting to meet it right away can set families up to fail at their goal and lead to discouragement. Even saving a small amount off of each pay check can add up to large savings over time. Discuss with your spouse and family what kind of financial savings goals might be realistic for you and try your best to stick to it. Writing down the goal and keeping it within view can help. There are also online savings calculators that can help families calculate their savings goals.
Tip #3: Shop Around for the Best Rates
When you are ready to open your savings account, check with several banks. Make sure to inquire as to any fees they charge, minimum balance requirements, required opening deposit amounts, and any perks they offer their customers. Find out how much interest your money will accrue while sitting in the bank. Weigh the pros and cons of different savings accounts from different banks to decide which account and bank might be right for your family. By earning interest and paying little or no fees on your savings account you will make your money work harder for you and grow faster.
Tip #4: Consider Automatic Deposits
Many banks now allow regular electronic transfers from your checking account to your savings account to automate the savings process. Having a set amount taken out of your pay check or directly from your checking account and placed in your savings account once or twice a month will help with your savings. This makes your savings automatic, which means you do not have to make a conscious decision to put money into your savings. This can be more convenient for you and add up to quicker savings. When you get a raise consider putting a bigger portion of it into savings or retirement. You will hardly notice the difference. After all you are already used to living on the old amount so increasing your savings is least painful at this point.
Tip #5: Research and Consider Online Savings Accounts
There are many savings accounts offered via the Internet. These accounts sometimes offer higher interest rates and can be more convenient. You can view your account and move money from one account to another 24 hours a day 7 days a week from any location with Internet access. With potentially higher interest and convenience, online banking is a win-win choice. [Editor’s Note: One of my favorite banks is EverBank it doesn’t have any branch offices so it saves on expenses and can offer higher interest rates. All transactions are handled electronically. ~Tim McMahon, editor]
Opening a savings account and putting money away does not have to be difficult or complicated. Even if you do not have a lot of extra money to save, every little bit can help. By doing your research, setting attainable goals, and making wise decisions you can build a solid savings for your family to rely on.
See Also:
- The Impact of Inflation on Savings
- Savings and Banking
- What are Long Term Investment Accounts?
- Choosing The Best Bank
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