Depending on your savings goals, we have some tips to help you choose the right savings account, along with some short- and long-term savings advice.
Quick Look at Savings in America The U.S. Federal Reserve reports that 25% of adults in America don’t have $400 in savings. It’s a startling statistic but one that everyone can work toward changing. By building short- and/or long-term savings, you could have enough in your accounts to help pay for emergency expenses, car repairs, as well as the down payment on your next car or home.
When to Choose Short-Term Savings Short-term financial goals include anything you want to buy or pay for in the next five (5) years. Those goals might include the purchase of a new television or recliner, as well as the down payment on a home or a car. Smart savings options for short-term goals should offer full or time-based liquidity (the option to access the money without penalty). Basically, you want to have access to the money just in case you reach your goal early or you need funds for an emergency.
Share Savings and Special Purpose Savings accounts offer full liquidity, and unbeatable security for short-term financial goals. Money Market accounts are another short-term option. Plus, 6-month and 12-month Share Certificates offer competitive yields to help your savings grow. However, you will need to lock the money away anywhere for the full term. Right now, these forward-thinking certificates are helping members earn nearly double the local area average.
When to Choose Long-Term Savings Retirement and college savings are the primary long-term savings goals for most Americans. The types of accounts and investments that are right for you depend on when you plan to retire or when the money will be needed for school, your risk tolerance (do you need a guaranteed return or are you willing to take some risk to possibly earn more), and how much you can put away every month toward your goals.
2 Steps to Boosting Your Savings Try these tips to help your short- and long-term savings grow.
Specify Your Goals: Instead of stating that you want to save money to buy a house, reframe it. Set a specific goal of $50,000 over the next five years for the down payment on a home
Free Up Extra Money: Look for places to trim your monthly budget. Then add the money you save toward your savings goals. Eat fewer meals out or cancel streaming services you don’t use. You might even take on a part-time job.