Saving refers to setting aside a portion of your income for future use. Saving money helps you build financial stability and security because these funds can be used for emergencies, major purchases, and long-term goals like retirement. While people generally only think about saving for emergencies and the future, it’s important to consider that paying off debt is also saving because paying interest to creditors adds up and reduces your purchasing power.
Here are some key points to consider when thinking about saving:
- Start small: You don't have to save a lot at once. Start with what you can and gradually increase as you get comfortable. Check out the NCUA’s Money Basics Guide to Saving and Budgeting to help you get started.
- Make it automatic: Set up an automatic transfer from your checking to your savings account so you don't have to think about it. Paying yourself first is a great way to prioritize your goals. You’re worth it! Did you know that using direct deposit is not only the best and fastest way to get your paycheck and tax refund, but also an easy way to save money?
- Have a goal: Decide what you're saving for, whether it's getting out of debt, a down payment for a house or car, or an emergency fund. Setting financial goals will help motivate you to save more.
- Shop around: Look for the best interest rates and fees when choosing a savings account. Higher interest rates mean your money will grow faster. The NCUA’s Money Basics Guide to Savings and Checking Accounts can help.
- Protect your savings: Keep your savings in an insured account at a credit union or other financial institution. Learn more about how your money is protected in a credit union.
- Keep it liquid: It's important to keep some of your savings in an easily accessible account, like a savings account, so you can access it quickly in an emergency.
By following these tips, you can build a healthy savings habit and reach your financial goals. Find a credit union (opens new window) near you to learn more about the financial products and services they provide.