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By Simon Volkov
Opening a savings account can be rewarding and financially beneficial to those who commit to making savings a priority. Contributing to a savings account can be challenging for those on a tight budget. However, most people have more money than they realize. With a few simple adjustments to their budget, nearly everyone can squeeze a few more dollars out of their income.
Many savings account providers offer incentives to new customers such as higher interest rates and reduced maintenance fees. Some banks offer cash bonuses when a savings account is opened or once they have been in place for three to six months.
Establishing a savings routine allows individuals the opportunity to reach short- and long-term financial goals. Many people find it easier to contribute small amounts weekly, as opposed to making one larger contribution each month. In order to determine which method works best, individuals should take time to review personal finances and create a household budget.
Financial experts, Suze Orman and Dave Ramsey recommend contributing a minimum of 10-percent of income to a savings account. Ramsey suggests considering savings deposits as a monthly bill. Thinking of savings as a required expense helps consumers put forth an effort to pay their self.
While many people perceive creating a budget as a chore, nothing could be further from the truth. Taking time to review expenses and developing financial goals is the only way to arrive at your financial destination. Saving money for the future provides financial security and peace of mind knowing funds are there if unexpected expenses arise or when investment opportunities are presented.
Not so long ago, most people were spending more than they earned. Millions of people lacked savings accounts and were living paycheck to paycheck. Many of those who lost their jobs also ended up losing their homes to foreclosure because they failed to have a financial safety net in place.
In order to prevent becoming a victim to economic changes, consumers must take control of personal finance. Learning how to be frugal and live within your financial means can allow you to have the things you want and need.
Numerous personal finance websites can easily be accessed from home and give individuals the opportunity to learn different wealth-building strategies. Once a household budget is created, individuals can determine how much they can afford to deposit into high interest savings account.
Consumers can maximize their savings by taking time to comparison shop savings account providers. Two good sources for comparing savings account are BankRate.com and Bankaholic.com. Both financial portals allow visitors to compare interest rates, transaction fees, monthly management fees, and opening deposit and minimum balance requirements.
When comparing savings accounts consumers should seek out providers which compound interest daily, as opposed to quarterly or annually. On average, high yield savings accounts earn about 1.4-percent interest, while traditional savings plans earn around .62-percent. Taking time to compare banks can allow consumers the chance to double earned interest.
Consumers should also review banking fees. Most banks charge fees for using ATM machines or obtaining paper bank statements. Others charge fees when consumers exceed monthly withdraw limits or when balances fall below minimum requirements. Banking fees can override earned interest and cost consumers more than they earn.
Most people can deposit five to ten dollars per week into a high interest savings account. Giving up morning lattes or fast food lunches can add up to substantial savings over the course of time. Making small changes to daily habits can eventually lead to financial freedom.
About the Author: Real estate investor, Simon Volkov provides a personal finance article library to provide visitors with wealth building information and resources. Topics include: tips for locating the best
savings account
, budgeting, and investing. Discover more money-saving strategies at
SimonVolkov.com
.
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