People feel
powerless and helpless when they don’t have a savings or retirement account,
live paycheck to paycheck or experience a financial crisis. You feel more
confident, in control and powerful when you have a savings and/or retirement
account - when you don’t have to worry about how you will pay for car repairs
or a broken furnace.
People who do
not save feel a temporary sense of power when they buy something that they
believe shows they are powerful such as a “BMW”, “going on vacation to a
Caribbean island or buying a designer item such as Luis Vuitton. However, these
feelings erode quickly when the bill arrives – the credit card bill and they go
back to feeling powerless. They also experience these feelings because they are
treated differently by society. Someone living paycheck to paycheck may go to a
liquor store or checking cashing place to cash their paycheck. However, if that
same person when to a bank to deposit their paycheck they would have a
different experience emotionally.
Nothing last
forever and nothing stays the same forever. Life happens and things are
constantly changing. Possessing a savings account will help you deal with
changes in life much easier than applying for a payday loan because you don’t
have a savings account.
Some benefits
of having a savings account are:
overdraft protection, no checking cashing fees, compound interest, cash
back rewards for some debit cards, you have more payment options, money available
for unexpected expenses.
Set a savings
goal, reward yourself when you reach a milestone, and read your statement
monthly. Here are 7 easy ways to start saving:
- Coins. Save loose change in a jar. The money saved can be put in a high interest online savings account such as Emigrant Direct, ING Orange Account or HSBC.
- Use automatic deductions. Sometimes it is easier for people to save money if they can't touch it or see it. Setup paycheck deductions or setup automatic transfers to your savings account.
- Use programs. Use bank or community programs such as: Bank of America Keep the Change, Wells Fargo Way2Save, Individual Development Accounts (IDAs), etc.
- Online. Open an online savings account that has a higher interest rate than a traditional savings account.
- Location. Open an account at a bank location that is outside of your work area or local neighborhood to reduce temptation of accessing the account on a regular basis.
- Separate. Create several separate savings accounts: an account for unexpected emergencies, a vacation account, an account to use for home repairs if needed.
- Contribute regularly. Contributing regularly quickly builds up your account balance and helps you take advantage of compound interest.
No comments:
Post a Comment