Set A Goal:
The first step to building a savings plan is setting a goal. A specific goal gives you something to accomplish and allows you to create a plan of attack with an end point in mind. Do you expect car repairs in the future? Are you planning a vacation? Or do you just want to have a certain amount of money set aside for anything unexpected in the future? Be as specific as possible, and use the S.M.A.R.T. goal setting process for the best results.
52 Week Money Challenge:
The 52-week challenge is a fun way to save money of the course of a calendar year. The idea is simple. Make a deposit each week, and increase the deposit by $1 the following week. Week one you deposit $1 to your savings account, week two you deposit $2, week three you deposit $3, and so on. On the last week you deposit $52 dollars, and over the year you will have saved $1,378! It doesn’t seem like a lot each month, but pays off after entire year. You do not have to start with $1 and end with $52, you can adjust the challenge so it fits your budget. You may realize that you are able to save even more than you thought you were capable of.
Savings Techniques You Can Use:
Round Up:
TruChoice offers a program called round up, that makes it easy for our members to save throughout the year. When a member enrolls in round up, each purchase that is made with a TruChoice Debit card is "rounded up" to the nearest dollar. The increased amount is then deposited into a member's primary savings account. This allows you to save money without having to think about it. This can be a great program to save up some extra ‘change’, and can be used in tandem with other savings strategies. Since the amount you save is dependent on the amount you swipe your card it may be hard to predict how much you will save in a given year, but it can give you a nice savings boost around the holidays!
Automate Your Savings:
When you receive your paycheck, automatically send a set portion to a designated savings account. This can be done by splitting your direct deposit between two different accounts, or by setting up a automatic transfer from your checking account to your savings each pay period. When you are creating your budget make sure to include an amount that you can save while still setting aside enough for your monthly necessities. This allows you to consistently build your savings account without having to remember to make manual transfers.
Use Multiple Savings Accounts:
Create additional savings accounts that serve specific purposes. When setting goals, you may have more than one thing in mind. You may have short term savings goal for a more immediate need (car repair), and medium-term savings goal (vacation), and a long-term goal (down payment on a house, college tuition). Splitting these goals into separate accounts will help you track progress with ease, and see each grow individually.
High Yield Savings Accounts, Money Markets, and Certificate of Deposits:
You can earn a higher APY (annual percentage yield) with a savings account than a traditional checking account. High yield savings accounts will pay higher rates than traditional savings accounts, allowing you to grow your savings faster. Money market accounts are valuable for medium term goals, and interest rates are typically based on the amount of money you have in your account. Certificates of deposits, known as CDs, offer higher rates than money market accounts, but in order to avoid early withdrawal penalties, you agree to leave your money in the account for a set period of time. CDs are great to help save for long term goals. TruChoice offers money markets and share certificates that provide members with the opportunity to grow their savings.