Ignite: How to start saving
Most of us have been told for our whole lives about how important it is to save money. But studies show that less than 15% of Americans feel confident in their savings. Sure, a big part of saving is making enough money to save some — which isn’t always in your control.
That said, there are a few things that you can and should start doing today if you’re learning how to save. Dip your toe into the habit of saving with these three steps.
Budget
The internet is packed with articles about budgeting. We’ve written more than a few ourselves. But something you don’t hear often about budgeting is how honest you have to be with yourself when you do it. No matter what style of budgeting you choose, the core of it remains the same — save more than you spend. It’s easy to build a budget and assume that you’ll save every single possible penny. The problem is that if you miss your budget because of unexpected expenses, miscalculation, etc., then you may start feeling defeated.
Set a realistic budget. Give yourself a little wiggle room. And remember, as long as you’re actively saving money, no matter how small, you’re on the right track.
Commit
It’s surprising how much of building wealth is about mindset. When it comes to saving and learning how to save, commitment is the best mindset to have. Even the best budget is no good if you’re not committed to it.
Put your savings goals into motion by setting up small, automatic transfers from your checking to your savings account each month.
Find the right accounts
To make the most of any financial product, you’ve got to find one that fits your life and goals. And, you’ll want one with as few fees as possible. Don’t lose your savings to unavoidable monthly fees. The best savings accounts have at least two of the following.
High annual percentage yields: More commonly referred to as “APY,” the higher this number is, the more your savings account earns in interest — which means it puts more money in your pocket.
No or low fees: Most financial institutions offer accounts that have monthly service fees. Typically, these fees can be avoided by meeting certain requirements. But if you don’t meet the requirements for the month, your savings account balance may be penalized. The right account for you is one with no monthly fees, or if that’s not possible, then finding an account with monthly fees that you can easily avoid is the second-best option.
No minimums to earn interest: Some savings accounts lock the best APYs behind minimum balance requirements. This means if you want the best interest, you’ll need to keep your savings account balance above the minimum threshold. But what if you have an emergency and need to dip into your savings? Or what if you’re new to savings and don’t quite have enough to meet the minimum threshold?
The smartest choice is to find a savings account that earns you interest regardless of the account balance. That means every penny you save earns you money.
You should be rewarded for saving
If you’re looking for a savings account that meets those requirements, then consider Ignite Savings from OCCU.
- High-yield APY
- No minimums to earn interest
- No monthly service fees
Get started with an Ignite Savings.
