7 Easy Ways to Start a Savings Account

Most people remember to pay their bills but forget about contributing money to a savings account. People feel powerless and helpless when they do not 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 “Mercedes Benz”, “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:

1. 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.
2. 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.
3. Use programs. Use bank or community programs such as: Bank of America Keep the Change, Wells Fargo Way2Save, Individual Development Accounts (IDAs), etc. 
4. Online. Open an online savings account that has a higher interest rate than a traditional savings account. 
5. 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. 
6. Separate.  Create several separate savings accounts:  an account for unexpected emergencies, a vacation account, an account to use for home repairs if needed. 
7. Contribute regularly. Contributing regularly quickly builds up your account balance and helps you take advantage of compound interest.