Savings 101

Whether you’re saving for a short-term goal, like a staycation , a long-term goal like owning you’re home, or somewhere in between, you need to decide where to put your savings.  That’s fully up to you.  Whether you decide to save it in a bank, envelopes or a jar, you should have one spot for each goal.  For example, one for a crazy Christmas, another for the cruise next summer, and another for home ownership.

If you’re living paycheck-to-paycheck, you could be thinking “there’s nothing left to save.”  Or even, “I don’t have the funds to open another bank account.”  Both of these statements may be true.  However, it’s all about perception and priorities.  As the saying goes, “If it’s important, you will find a way.  If not, you will find an excuse.”

With all of that being said, here’s an expansion of where to stash those savings:

Banks or credit unions

Just a quick reminder, on a normal basis, if you open an account with cash it is available for withdrawal immediately.  If the required opening deposit is $100, you can withdraw all but $10 within 24 hours.

Which is the best option?  That is where you get to do some research.  The most obvious answer is your current bank.  However, you may want to keep in mind that might be a little too convenient to access your funds.  The two things you need to be wary of are 1) monthly fees, and how to avoid them and 2) the minimum amount required to open an account.

Envelopes

Sounds simple enough, right?  True.  One advantage of the envelope system is tracking your goals as you go along is much easier.  For example: You’ve done the research and the vacation you want to surprise your spouse with will cost $1200.  Say you have $50 to put into the funds.  Cross off the original $1200 and write $1150. Much easier to keep track of where you are and where you want to be.

You can take it even a step further, by using 8 x 12 envelopes.  On the outside put pictures of what the item is for.  Tada!  You now have a mini-vision board!  Even a three-ring binder with pencil holders as envelopes.  (Quick trip to the dollar store for the supplies.)

Jars

Just like the envelope system, it’s simple.  This is great if you’re a visual person.  You can watch your money add up.  It is very easy to remember to empty your pockets of change into the jar, if you keep it in a prominent place of your room.  As with the envelope system, write on the outside what the money is going to be used for.

As with anything, getting started and staying motivated is the hardest part.  That is why goals or reasons for saving is important.  Before you know it, it will become a game!