Advertisement

HOW TO BECOME SUCCESSFUL WITH YOUR SAVINGS ACCOUNT

thumbnail

HOW TO BECOME SUCCESSFUL WITH YOUR SAVINGS ACCOUNT

"Do not save what is left, after spending, but spend what is left, after saving." quoted by one of the greatest investors of all time, Warren Buffet. In other words, you should prioritize putting a portion of your earnings into your savings before even spending. After all, even one of the wealthiest investors who have a majority of his net worth invested knows the importance of savings. Nonetheless, not everyone is aware that savings are a necessary financial goal in your life.

Before getting a savings account, you must know why you need it in the first place. A savings account is where you safely store your money and will depend on whether you will use it for the short term or long term. You must identify your short-term and long-term goals to achieve financial freedom with your savings account.

Advertisement

Setting goals

● Short term goals

Short-term goals of a savings account include purchases of your wants such as luxuriousthings, rent-payment, credit card payments, and travel plans. Given such goals, your savings account is not the first go-to if you will be spending on things mentioned.

Although you have a budget allocated for savings, and you can use it to pay off your short-term goals, the first go-to will always be your expenses budget which is ideally half of your earnings should go to your expense budget, while twenty up to thirty percent goes to your savings.

Advertisement

Moreover, if you put half of your earnings into your expense budget, your savings won't be affected that much, and it will grow even more. In addition to this, an emergency fund should be your priority in terms of short-term goals. Thus, you have to preserve your savings account even if it's for a short-term goal because it will be your last resort.

● Long-term goals

Although your savings account could be for short-term goals, financially literate people knows it is best for long-term goals. The long-term goals of your savings account could be for retirement, emergency fund, mortgage, college fund, or even starting up a business. Above all mentioned goals, retirement and emergency funds are the critical points of your account savings goals.

According to previous statistics, the average retirement for American workers is 66. Surprisingly that's a high number for retirement, and one factor that might be causing this is the negligence of retirement plans. Therefore, the result above shows how important your savings account is to enjoy the rest of your life after retirement. In addition, more than half of the American population has less than three months' worth of emergency funds. With this result, we can conclude that many are still unprepared for their future, and the majority are not giving priority to their savings account or saving habit.

Advertisement

Whether you are saving for an emergency fund or retirement, you must determine your goal before opening a savings account. For instance, if you plan to save for retirement, your annual savings should be higher if you are older. As a result, your retirement fund won't fall short.

Planning

● Budget

Making a budget for everything you spend is not easy, but it will be your ally if you plan itproperly. Budgeting is a crucial part of your success with savings, as this will help you to efficiently save.

One of the most popular strategies of budgeting is the "50/30/20" rule, the strategy multiplies those numbers to your income and allocates it. To be specific, fifty percent of your income will be allocated for your needs, thirty percent will be allocated for your wants, and twenty percent for your savings. Following the strategy will limit your expenses on other things if not necessary.

Advertisement

Also, the "50/30/20" rule promotes a healthy lifestyle where you get all your needs, wants, and savings at the same time.

Evaluate

● Cut on spending

After creating a budget, you should evaluate your expenses and prioritize them according to the most important to least. Evaluating your expenses will help you reduce your spending and put more into savings. Doing this will be the hardest in the first few months. However, as you go along with it, it will become a habit leading towards financial success.

Discipline

Once you have planned and evaluated everything, you must be on track every day. Success in a savings account does not come over a week or a month, it will require your consistency with the lifestyle that you need to adapt. Furthermore, a better savings account will require better discipline. When the time comes that you get tired of doing the same things over again, always go back to your goal or why you are doing it. The sacrifices will be worth it in the end.

Choosing the best savings to account for you Lastly, your planned goals, evaluation, and discipline won't be successful without choosing the best savings account for you.

There will be several factors to consider in choosing the best savings account such as the interest earned or annual yield, penalties, minimum balance requirement, and credibility. Below are a few samples of the best savings account to choose from:

Advertisement

● Marcus by Goldman Sachs

With no minimum balance requirement and attractive .50 APY, this savings account has been rated as top overall for several customers. Also, recommended by many credible websites as the best saving account.

● Bask Bank

One of the most superior interest-earning with .70 APY offered to clients. Also, with no penalty of minimum balance requirement and the most important incentive of zero monthly fees. Even with the high APY, this bank is also FDIC insured, meaning your money will be covered up to a certain amount.

● Ally

This bank has maximized its online presence and through innovation, they have encouraged clients to save more because of its amazing features. With the great online features and customer service, Ally still offers an attractive APY of .50% with no minimum balance and maintenance fees.

Once you have chosen the savings account of your preference, all that is left for you to do is follow the steps provided above. After following those steps, you are already much closer to your financial success than you were.

Popular Categories

Insurance Money Investing Credit cards
Advertisement
Advertisement