The best time to start learning how to build savings is when you are just getting started. High school graduates, college students and young adults that are new to the work force are at the perfect stage of their lives to begin maximizing the potential opportunities available to them.
What can make it difficult is that it is in our youth that we are often burdened with student loans, high interest car loans for first time car buyers and very little savings established. As we grow older, other burdens will arise, such as credit card bills, building a family, raising children and having a mortgage hanging over our heads. It seems as if there’s always something preventing us from saving money.
It is important to overcome those obstacles and learn to look beyond our burdens to see the benefits that even a little bit of savings could do for our future. With all of the savings, investment and other options available at your local credit union in New Bedford, now is the best time to build financial security for your future and establish good saving habits.
Step One – Establish Savings Goals
Before you start a savings plan, it is important to establish some goals. Some people save money for a big future purchase, such as a new car or a down payment on a home. Others save money to start a small business or to launch an early retirement savings.
Whatever your reason or goal, once you put your eyes on the prize, it will be much easier to achieve it. If you have a couple of different things you want to learn how to build savings for, you can create different accounts for each goal. Speak with a representative at your credit union in New Bedford for savings and investment opportunities that can help you start saving today.
- Save money on a regular basis, putting something from each paycheck into savings.
- Learn how to “pay yourself first” by putting money into savings before shopping or using disposable income for anything else.
- Set up an auto-savings plan through your credit union to deduct a specific amount from each paycheck every month.
Step Two – Create an Emergency Savings Fund
In addition to saving toward something you want to purchase or do in the future, it is also a good idea to create an emergency savings fund. With an uncertain job market and economy still occurring in the United States, it is a good idea to prepare for potential changes to your income or situation.
You should aim to build an emergency savings fund that would cover at least six months of your living expenses, should you find yourself out of a job. Consider rent, groceries, utilities, car repairs, medical expenses and anything else that you pay on a regular basis.
- To maximize your emergency savings fund, try to save at least 10 percent of any money that you receive.
- Once you reach your savings goal, go over your list of expenses to make sure that nothing has changed since you first made your list.
- Speak with your local credit union in New Bedford about additional savings opportunities that could help you build your emergency savings fund.
Step Three – Launch a Retirement Savings Account
You might think you’re too young to start thinking about retirement, but it is never too early to start a retirement savings account. Take advantage of any tax-advantage retirement accounts and opportunities at work or at your credit union. The sooner you start taking advantage of savings opportunities, the more you’ll be able to enjoy the benefits of compound growth on your savings.
If your employer does not currently offer a retirement savings program at work, consider setting up an IRA (Individual Retirement Account) through your credit union in New Bedford. Make regular transfers into this account and consider setting up an automatic transfer option from your checking account or share draft account into your IRA or other savings account at your credit union.
- Start your retirement savings at work and build off of your employer’s offerings.
- Create a retirement savings program for yourself at your credit union to establish your savings or to augment the offerings you receive at work.
- Check the viability of your retirement savings goals regularly to ensure that you are properly allowing for cost of living changes and other financial issues that may occur.
Step Four – Long Term Savings
In addition to setting up an emergency savings fund or focusing on retirement savings, there many be other reasons why you might want to set up long term savings goals. A long term savings plan allows for the possibility that funds might have to be used for urgent or important circumstances, but should also have plans to replenish any withdrawals that may have to be taken right away.
Consider using share certificates, money market accounts and other fixed term savings investment programs for the best methods for learning how to build savings. You will earn more interest with these types of accounts and the restrictions in place will help you to resist the urge to withdraw funds unless it is absolutely necessary.
- Ask your credit union in New Bedford about long term savings programs and services.
- Make sure to keep your savings in a federally insured credit union to protect them against loss.
- Be wary of investments that are not insured and come with considerable risk.
Saving for Your Future
Once you learn how to build savings and see all of the opportunities available to credit union members for building retirement savings, creating an emergency savings fund or simply saving for a future purchase, you’ll wonder why you didn’t start sooner. Speak with your credit union in New Bedford about all of the opportunities available to young adults that will help you establish a solid savings plan and begin preparing for your future.