Each week, we are sharing a financial wellness tip to help you make the connection between financial management decisions, your overall wellness, and student success. Money touches every aspect of our lives, and a lack of financial literacy can cause unnecessary stress and negatively impact our mental and physical health.
Setting a Savings Goal
If saving money was a part of your New Year’s resolutions, here is some information on how to make saving a habit in your life. The more you save and the earlier you start means that you will have that much more time and potential for your money to make money – also known as the concept of compound interest.
- Start Now – Even if you can only save a few dollars a week, or every paycheck – start doing that now and consistently. The easiest way to do that is set up an automatic savings plan. You link your savings and checking accounts together, or open a savings account if you do not already have one, and then link them, and designate a set amount from your directly deposited paycheck, let’s say $25 or $50, to be automatically deposited into the savings account and the remaining balance will go into your checking account. A system like this makes saving a no-brainer – those dollars become out of sight, out of mind, and you won’t be tempted to spend them since they will be in a separate account.
- Research Rates – When thinking about establishing an automatic savings plan, you should really take a hard look at your current bank and the interest rates and fees for the accounts you have there. Not all banks are created equal, and offer vastly different terms, interest rates and fees on their various products. You can establish an account at a brick and mortar bank or credit union, or opt for an online bank that might offer higher rates because they don’t have the expense of having to maintain and staff a physical location. The point is that doing your research can really pay off for you and help you grow your investment/savings. A great tool for looking at some of the best interest rates out there for savings and checking accounts is bankrate.com.
Make sure whatever bank you choose for your accounts is FDIC insured, so that your money is protected in the event of a bank’s failure. FDIC insurance covers depositors' accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank's failure, up to the insurance limit.
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