Starting a savings account is an essential step towards financial stability and success. However, with so many expenses and bills to pay, it can be challenging to set money aside. Luckily, there are various ways to build your savings account and kick-start your savings journey. Whether you’re new to building your savings or need a refresher, these strategies will help you reach your financial goals.
Here are the 5 tips you should follow:
- Open a Dedicated Savings Account
- Automate Your Savings
- Make Catch-Up Contributions
- Invest In Yourself
- Live Below Your Means
Open a Dedicated Savings Account
The first step to jumpstarting your savings account is to open a dedicated savings account. It may be tempting to simply keep all your money in your checking account, but a savings account will offer you several benefits. It’ll help you keep your savings separate from your everyday expenses and monitor your progress towards achieving your savings goals.
Additionally, savings accounts usually offer higher interest rates than checking accounts, allowing your money to grow over time. To open a dedicated savings account, you’ll typically need to provide your personal information, such as your name, address, and Social Security number. You may also need to make an initial deposit, so be prepared with the funds needed.
At KOIN, our savings accounts include:
- Regular Savings: This allows you to earn interest whether you have $10, $100, $1,00 or even $10,000 to contribute to your personal savings.
- Platinum Plus Savings: Similar to a Money Market Account, these are designed for larger deposits and therefore earn larger returns.
- Certificate Accounts: With terms ranging from six to 60 months, this allows you to save for a fixed length of time and earns you higher dividend rates than other accounts.
Ready to start saving? Open your account with KOIN today.
Automate Your Savings
One of the most effective ways to build your savings account is by automating your savings. You can do this by setting up a direct deposit from your paycheck or by scheduling a recurring transfer from your checking account to your savings account.
When deciding how much you should automate to your savings account, it’s important to first evaluate your budget and determine how much you can realistically afford to save each month. Experts recommend saving at least 10% of your income, but any amount is better than none. Start small if you have to, and then increase the amount as you can. This will help you build your savings faster and give you an extra cushion in case of emergencies.
Make Catch-Up Contributions
If you are over 50 years old, catch-up contributions can help you increase your retirement savings. They allow you to contribute more money to your retirement account than the annual contribution limit set by the IRS. For example, if the annual contribution limit for 401(k) plans is $19,500, but you’re over 50, you can contribute an additional $6,500 as a catch-up contribution. This means you can contribute up to $26,000 in total.
Catch-up contributions work the same way as regular contributions, and they are tax-deductible. By contributing more to your retirement account, you can increase your retirement savings and potentially reduce your tax liability.
To make catch-up contributions, you need to contact your retirement plan provider and let them know how much you want to contribute. You can also adjust your payroll deductions to automatically include catch-up contributions.Making catch-up contributions is a smart way to jumpstart your retirement savings, especially if you are behind on your savings goals. However, it’s important to consult a financial advisor to determine if catch-up contributions are right for you and your financial situation.
Invest In Yourself
Investing in yourself can take many forms. One way to invest in yourself is to make purchases that will help you achieve your goals. This could be investing in a course or program to develop a new skill, purchasing books or other resources to deepen your knowledge, or buying equipment or tools to enhance your work or hobbies.
When making these purchases, it’s important to consider the long-term benefits they will bring. Ask yourself if this purchase will help you achieve your goals or if it’s ultimately an unnecessary expense. Another way to invest in yourself is to prioritize self-care. This could be investing in healthy food, exercise equipment, or wellness activities that will help you stay physically and mentally healthy. Taking care of yourself is a crucial part of being able to achieve your goals and pursue your passions.
Live Below Your Means
To live below your means, you’ll need to spend less than you own. That means being aware of your impulse purchases, eliminating unnecessary expenses, and sticking to your goals.
It’s easy to get caught up in the consumer culture of today’s society and feel like you need the latest gadget or trend to be happy. But, the reality is that most of those things aren’t necessary and often leave us feeling unfulfilled.
To get started, you’ll need to create a budget. Start by tracking your spending for a month to get an accurate picture of where your money goes. Then, categorize your expenses into essentials like housing, transportation, and food, and non-essentials like entertainment and shopping. Finally, set a spending limit for each category and stick to it.
Once you have a budget, it’s easier to identify areas where you can cut back. Take a hard look at your non-essential spending and ask yourself if those things are really necessary. Consider cutting back on eating out, subscription services, or clothing
Living below your means may require some lifestyle adjustments, but the rewards are worth it. By spending less than you earn, you’ll have more money to put towards your savings goals and be on the path to financial freedom.
Let KOIN Help You Build Your Savings Account
At KOIN, we know that saving money isn’t always easy. That’s why we offer a variety of savings accounts and resources that will help you stick to your goals. When you bank with us, you become part of a community looking out for your best interests.
Contact us today to learn more about the savings accounts we offer.