Posted on: 29 May 2020
When it comes to money, saving it can sometimes be the most difficult thing. Savings accounts can be confusing, and many people do not know how they should go about saving their money or how much money to save. If you are struggling with anything regarding your savings, check out a few tips to help you out. Then, you can better address your savings needs and be sure that you are doing your best to save money.
Have At Least One Savings Account
Firstly, in order to properly save your money, you need the right kind of banking account. You cannot properly save your money with just a checking account. You may end up spending the money that you intend to save, and you might not be able to keep proper track of how much should be saved every paycheck and every month.
Open at least one savings account for your saving needs. If you have something specific you want to put some of your savings away for, you can have more than one savings account. For example, you can have one savings account for an emergency fund and another for saving to buy a house. Keeping these things separate can make it easier to track and achieve your goals.
Another example is if you are a freelancer and need to pay quarterly taxes. Have one savings account for taxes and one for your personal savings.
Pay Attention to the APY of the Savings Account You Open
Another factor to keep in mind when opting to open a savings account and start saving is the APY (annual percentage yield) of your savings account. This is the percentage of interest you will be receiving on your savings. The higher the APY, the better.
Currently, higher yield savings accounts have APYs around 1.3 to 1.5 percent. Look for an account with a similar APY to get the most benefit from saving your money. This may mean that your checking and savings accounts are with different banks, but the benefits of the APY make it worth the potential slight inconvenience.
Put Away 20 Percent Every Month
When you are ready to start putting money into your savings account, it should be your goal to put away 20 percent of your take-home income every paycheck or every month. This is a good amount to get you started. Of course, if you are capable of saving more of your income, you should do so.
The next best thing you can do is to budget. Calculate out all of your bills and expenses for every month, and stick to your budget. If you do so, you can save all of the money you make beyond your bills and expenses, which could be 20 percent of your income or possibly much more.
These tips will help you get started with saving money and managing your savings accounts. Now, all you have to do to get started is to open a new banking account.Share