Learn More About The Importance of Savings and How to Build Emergency Savings
So far we have covered Credit 101 and Taxes in our Financial Literacy Month blog series. Each blog topic corresponds to our free online financial education courses, so be sure to explore all TEN of our short, self-paced modules.
Today we cover two elements of the same important topic: SAVINGS. One of the first things any small business owner needs to understand is the need for a savings plan, including building an emergency savings fund.
Third in this series? SAVINGS
What are your savings goals? Are the long-term, immediate, or both? It’s important to identify your goals and write them down to commit to them. The Savings module offers a slider tool to help you calculate how much you need to save each month to reach your savings goals.
Choosing a savings account may seem simple, but financial institutions offer different savings accounts that can help you accomplish different goals. Here are a few savings vehicles you can choose from:
- Savings Account: Offer less access to your money than a checking account so you’re not tempted to spend it, plus most financial institutions pay interest – which compounds over time – on money deposited in this account.
- Money Market Account: Part checking and part savings; you can write checks from this account but there may be restrictions, and these tend to feature higher interest rates than on standard savings accounts, and may require a higher minimum balance.
- Certificate of Deposit (CD) or Share Certificate: Deposit that is held for a specific period of time (6 months, 9 months, 1 year, etc.) on which Financial Institutions pay interest to the CD holders on their deposit during that time period. These tend to have higher interest rates than savings accounts, but can only access money after the term of the CD has expired. If you withdraw money earlier, penalties will apply.
- Online Savings Account: Accounts managed and funded primarily online (all deposits and transactions done electronically) that tend to feature higher interest rates than on standard savings accounts, but may not have all the options, support and services of a brick-and-mortar bank.
Click here to create your login and take our Savings 101 Module to learn more, including smart savings habits you can start today.
Building Emergency Savings:
Saving money doesn’t have to feel like a sacrifice – there are small things you can do every day and lots of available resources to help you build your savings. Learn savings tactics and strategies for cutting you debt (like paying down your smallest debt first) and alternatives for where to keep your savings.
Our Emergency Savings module features an interactive slider for averages of unexpected costs like ER visits and auto repairs, as well as a tool to help identity where you spend the most each month and tips for easy changes.
Click here to create your login and take our Building Emergency Savings.
Help everyone celebrate Financial Literacy month!
Click here to create your login and get started on all TEN of our free financial empowerment modules and share this free resource with your friends and family.
Want more info on financial education? Check out our fiscal fitness blog post from New Year’s, or head over to the SBA website for some great resources about financial literacy and stay tuned for more in this financial education series.