You can easily earn up to five times the national average savings rate (currently by opening a money market. Not only that but many online banks have a $1 minimum deposit and charge no monthly or annual fees.
Not only do you want a great rate, but you want a strong bank. RateCatcher.com provides a chart (updated daily) with safety ratings of banks that offer the best money market rates.
Online money market account are FDIC insured and allow you to transfer money back and forth to your traditional/branch based checking account free.
One feature that is especially useful
for those of us who struggle to consistently put aside money is the
automatic savings plans offered by various banks like ING Direct,
AmTrust Direct, and others.
An automatic savings plan allows you
to specify an amount to be transferred from your checking account to
your online savings account on a regular basis.
I prefer weekly transfers because
it's less likely to cause my checking account to go into overdraft than
a larger amount being transferred once a month.
2. Consider your needs vs. your wants. Think about items you purchase on a regular basis. These add up. Where can you save?
Do you eat out at restaurants a lot?
Can you cut back on daily expenses, such as coffee, candy, soda, or cigarettes?
Do you have services you do not
really need, such as cable television, a cell phone, or an expensive
gym membership which is rarely used?
3. Set up a direct deposit and an automatic transfer to your savings account.
When you get paid, put a portion in
savings through direct deposit or automatic transfer. If you have a
checking account, you can sign up to have money moved into your savings
account every month. What you don't see, you don't miss! U.S. Savings
Bonds can be purchased through payroll deduction.
4. Pay your bills on time. This saves the added expense of:
Late fees
- Extra finance charges
- Disconnection fees for phone, electricity, or other services
- Fees to reestablish connection if your service is disconnected
- The cost of eviction
- Repossession
- Bill collectors
5. If you use check-cashing stores regularly, you might be paying $3 ' $5 for each check you cash.
This can easily add up to several
hundred dollars in fees every year. Consider opening a checking account
at a bank or credit union.
6. If you get a raise or bonus from your employer, save that extra money.
Since you're not used to having that
money in the first place, you certainly won't miss it. A rainy day
savings account can be a valuable asset.
7. If you have paid off a loan, keep making the monthly payments to yourself.
You can save or invest the money for your future goals.
8. If you receive cash as a gift, save at least part of it.
Have you ever heard of tithing your
money? If you were to save 10-20% of your monthly checks and perhaps
50% of gift money that would equal a hefty sum when combined in savings!
9. Avoid debt that does not help build long-term financial security.
For example, avoid borrowing money
for things that do not provide financial benefits or that do not last
as long as the loan. Examples include: a vacation, clothing, and
dinners out in restaurants. Examples of debt that helps build long-term
financial security include: Paying for a college education (for you or
your child) Buying or remodeling a house Buying a car to get to work
10. Save your change at the end of the day.
Take that change and deposit it into the bank (every week or month). You may find it surprising how a few cents can add up to a substantial sum of money!
11. When you get a tax refund, save as much of it as possible.
12. If your work offers a retirement plan, such as 401(k) or 403(b) plan that deducts money from your paycheck, join it!
Most employers will match up to $.50 on each dollar you contribute. The matched amount is free money!
13. If you decide to make investments, do your homework.
Know what you are investing in.
Get professional advice if you need it.
You should have enough money in
savings to pay for 2-6 months of expenses in case of emergency. Make
sure you have an emergency savings account before considering investing
in non-deposit products.
14. If you own stocks, reinvest the dividends to purchase more stocks.
Some
companies offer an easy way to do this called a Dividend Reinvestment
Program (DRIP). This process increases your investment faster, similar
to compounding.
15. If you are interested in learning about investing, you might want to consider an investment club.
The National Association of
Investment Clubs (NAIC) is the corporation that supports this
investment style. Investment clubs are groups of people who work
together to understand the process and value of investing even small
amounts of money (as little as $5-$10).
An ounce of savings today is worth a pound of gold tomorrow.
Visit: RateCatcher.com for More Tips on Saving and Investing
