Financial literacy plays a crucial role in your ability to make sound money decisions. When it comes to saving money, the knowledge and skills you learn can help you set attainable goals and budget to meet them. A sizeable nest egg will allow you to feel secure in your financial footing – but it can do so much more! Use this guide to familiarize yourself with the many doors saving can open for you both now and in the future.
Why you should up your savings game
1. Achieve financial freedom
What changes would you make in your life if money was less of a factor? A well-funded savings account can give you the freedom to make decisions that may impact you financially. Reliable cash flow could allow you to shift careers, travel, or even start a small business without completely derailing your budget. Every dollar saved is one more step toward living life on your terms.
2. Reach goals
Inspiration is an important part of the saving equation. Whether it’s a new ride, your dream house, or getting out from under debt, having a goal – and holding on to it – will help you commit to saving. The best credit unions give members the option to open multiple savings accounts and rename them to better track progress toward multiple goals. You can rename them “car fund,” “trip to Mexico,” or whatever helps you strategize best! Every transfer and deposit gets you closer to making your dreams a reality.
- Tip! Money Management, available to Online Banking and mobile app1 users at General Electric Credit Union (GECU) can help you track goals with ease. Set monthly contribution goals, use the progress meter, and so much more!
3. Reduce stress
Over 70% of Americans say money is a source of stress in their lives.2 If you’re stressed about money, how much of that anxiety stems from your current savings balance? Do you have an emergency fund to tap into if life throws you a curve ball? If not, starting or upping your contributions to a savings account can help you weave a safety net. Knowing you have money to fall back on will give you peace of mind and a chance to rebound if the unexpected happens. If your current financial situation is making saving difficult, read Break the Cycle: How to Save When There Isn’t Room in the Budget for practical advice.
Your saving toolkit
GECU members have a wide range of saving solutions and tools at their disposal. If you live or work in the Tri-State you can bank with us! Confirm your eligibility and start experiencing a better way to save.
Interest-earning savings vehicles
- High-yield savings accounts. Get more out of your savings balance by placing it in a high-yield savings account. Typically, the funds kept in a savings account sit for longer, making them a fantastic opportunity to leverage interest. Place your balance in a high-yield savings account and let compound interest do the heavy lifting! Some high-yield savings accounts even have multiple tiers that reward you with a higher rate for growing your balance.
- Certificates are a great way to make guaranteed earnings. You open one with an initial deposit and let it sit and earn interest for a predetermined amount of time, known as the certificate’s “term length.” Once a certificate reaches maturity, you can opt to withdraw the funds penalty-free or reinvest them back into a certificate – a strategy called certificate laddering.
- Round-Up. Give your savings a boost with Round-Up, the free GECU checking account perk that rounds your debit card purchases up to the nearest dollar and deposits the difference into your savings account. A $3.25 cup of coffee means 75₵ for your savings!
- Payroll deductions are a simple way to be intentional about saving. For example, you can set it up so an employer sends 80% of your pay to a checking account and 20% to a savings account.
- Automatic transfers. Arrange automatic transfers on a schedule that works for you – like $100 biweekly – through Online Banking or our mobile app.
This Financial Literacy Month, take the time to educate yourself on the importance of saving and the many ways it can transform your life. With a little inspiration and free tools and resources from GECU, you can put your savings goals in reach.