Grow Your Savings
Make paying yourself a priority and watch your savings grow.
The difference between people who save and people who never manage to do so is priority. Unfortunately, many people put savings on the back burner. They place more importance on discretionary spending, with the intention of putting what is leftover in savings.
This is a mistake. According to Burton Malkiel in his book The Random Walk Guide to Investing, “Procrastination is the natural assassin of opportunity. Every year you put off investing makes your ultimate retirement goals more difficult to achieve.” If you aren’t paying yourself first by depositing money into a savings account, chances are your money will be spent each month and never make it to a savings account at all.
Once you’ve made the decision to pay yourself first, you have more options than you may realize. Many banks go beyond a simple savings account in their savings offerings. Let’s review a few options.
Some banks will match a certain percentage of your automatic transfers to savings, up to a certain amount. BBVA Compass, for example, offers a Build My Savings account with this feature.
Money Market Accounts
These accounts offer higher interest rates based on a tier system that depends on the amount of the deposit. They often require higher minimum balances and fewer withdrawals. Interest paid on these accounts is compounded daily and paid monthly, then applied back to the principle amount, so you’re paid interest on interest.
CDs are savings accounts with higher interest rates and restrictions on when you can access the money. These accounts are good ways to save and earn interest if you do not intend to touch your savings until a specified future date, which is often the point of saving.
Wonder if you’re saving enough? Some banks, including BBVA Compass, actually provide a personalized review and a savings profile to assess your personal situation. For example, you can see exactly where you might be saving more than you currently are, and how your savings habits compare to those of a successful saver. This insight allows you to tackle specific changes in a focused manner, in order to make a big difference in your savings.
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