The holiday season is quickly approaching, bringing laughter and celebrations and often, increased spending. It is easy to get swept up into the festivities, however it is crucial to continue to manage your financials appropriately. In this blog we will discuss the importance of savings accounts, the types of accounts available, how to choose the best savings account for your personal needs, and some tips to help you save during the holidays.
Why Are Savings Accounts Important?
Savings accounts play a significant role in the management of your finances. These types of accounts are a safe place to set aside your money to earn interest, helping your funds grow. Here are two examples of why savings accounts are important:
- You Can Manage Your Money Effectively: Savings accounts provide a smart and organized way to put money in a place that will be there for your future needs, emergencies, or specific goals such as saving for a new car.
- You Can Earn Interest: It is better to keep your money in a savings account rather than cash at home or in a checking account because a savings account earns interest on your balance, increasing your overall savings over time.
Types of Savings Accounts
There are several types of savings accounts to look at, each with their own benefits.
- Traditional Savings Accounts: These accounts are easy to open, and they often have low minimum balance requirements. These accounts typically have a low interest rate but are the easiest way to start your saving journey.
- Money Market Accounts: These accounts incorporate features from both checking and savings accounts. They often have a higher interest rate, but also a higher minimum deposit to earn that rate. With Money Market accounts you also have check writing privileges and access to a debit card.
- Certificate of Deposits (CDs): These accounts typically offer the highest interest rate that a financial institution has to offer. However, when opening a CD, the funds are locked in for the term of the CD. Withdrawals can be made, but there is usually an early withdrawal penalty fee that must be paid.
To discuss which savings account is best for you, please reach out to one of our Customer Service Representatives today.
Choosing the Best Account for Your Savings Goals
When choosing the type of Savings Account you wish to open you should consider the following factors to make sure the account lines up with your financial needs/goals:
- Interest Rate: Look for savings accounts that have competitive interest rates to maximize your savings potential.
- Accessibility: Determine whether you will need access to the funds or not. If you know you will not need to access the funds, then a CD is a great option for you.
- Fees and Minimum Balances: Make yourself aware of any monthly fees or minimum deposit requirements on the account you are planning to open.
- Flexibility: Taking all the details into consideration, choose an account that will best support your financial goals in the long term.
5 Tips to Help You Save
While saving money during the Holiday season may seem daunting, here are five tips to help you get started:
- Set Up a Holiday Budget: Plan out your estimated budget for the Holidays in advance to avoid overspending.
- Create a Shopping List: Make a list of the gifts you need to purchase along with other Holiday expenses to stay organized. Try to not waiver from this list.
- Shop Early: Do not wait until the last minute to buy your gifts and Holiday essentials. Take advantage of early sales and events such as Free Shipping Day which is a day each year many retailers participate in across the United States falling this year on December 14th, 2024.
- Pay with Cash: Withdraw from your account the amount you have budgeted for the Holidays in cash and use the cash to make your purchases. This makes it harder to waiver from your budget because you are only using the cash you have versus a debit card that has your entire account attached to it.
- Rein in Other Spending: Try to cut back on non-essential expenses to give yourself a larger budget for the Holidays.
By choosing the right savings account and executing smart saving goals, the Holiday Season should be enjoyable with less financial stress. The answer to a financially healthy Holiday Season lies in the planning and budgeting for your financial needs. Happy Saving!
This blog is for educational purposes only and should not be used as financial advice. Come inside and visit a branch, and one of our Loan Officers will be happy to assist you. At Auburn Savings, we nurture relationships, foster ambition, and are driven by purpose—You Come First. Bank On Us™.