No matter your age, profession, income, or goals, having some savings stored away can be a helpful resource for unexpected expenses, large and important purchases, retirement, and more. But building a savings account is no easy task. It takes time, dedication, and self-discipline.
Here are some ways that you can bolster your savings account starting today to ensure you are financially ready for whatever life throws your way
1. Finding High Savings and Low Rates
Begin your successful savings journey by banking with an institution with high savings rates and low fees. If you are already a Member of Vantage West or another credit union, you are off to a great start! Credit unions are designed to financially benefit their Member-Owners and actively work to ensure they do not charge unnecessary fees and offer competitive savings rates. Regardless of the type of financial institution, take the time to research the following components and compare them to your current institution:
- Minimum deposit requirements
- Monthly maintenance fees
- Annual Percentage Yield (APY)
- Minimum balance requirements
2. Budget to Manage Your Finances
Budgeting is a great way to get a better understanding of your current financial situation and manage your monthly income and expenses.
Start by compiling a list of all your monthly expenses: rent, utilities, transportation, etc. During this step, consider finding expenses that can be reduced or eliminated. Maybe there is another internet provider nearby that offers a better rate or is running a promotion. Maybe there are simple ways to reduce your energy consumption per month: by unplugging unused appliances or switching to energy-efficient lightbulbs.
This is also a great time to review what subscription services you use and determine if any can be removed or paused. While subscription services are convenient because they do not require you to take any action to continue a service, they are also a convenient way for businesses to continue receiving money from you, even if you are no longer actively using their products or services.
Calculate how much of your monthly income is left after your monthly expenses. Then, determine what percent age of that amount you want to go towards non-essential expenses like entertainment and dining out, as well as what percentage you want to go towards savings
Setting a maximum amount per month that you will allow yourself to spend on non-essentials will help to ensure that a portion of your monthly income is contributing to your savings goals.
3. Use Automatic Deposits
Building on the previous section, consider setting up automatic deposits to your savings account every month.
This is a simple step to ensure that you meet your monthly savings goals and expectations. Consider scheduling contributions to happen on the same day that you receive your paychecks so that the contribution goes directly to savings instead of appearing in other account balances. Setting up automatic deposits is generally a quick and easy process and is available in mobile and online banking platforms for many financial institutions. You can also set up direct deposit through your employer.
4. Pay Off Existing Debts
While this process will often take time to complete, it will help you save money in the long run. That is because the longer it takes to pay off a revolving debt, the more interest accrues on the total, increasing the amount you pay overall.
We suggest paying more than the required monthly payment on credit cards to help reduce the time it will take to pay off the outstanding balance, reducing the amount of interest that will accrue. The more you can pay per month the better, but even a small increase will help over time.
Investing is the process of buying and holding investment products with the expectation of growing your money. While some may be riskier than a standard savings account, investments often give you the chance to earn a higher potential rate of return.
There are many ways to invest your money, with varying levels of risk, time duration, and potential return on investment. When considering investments, it is important to first identify your investment objectives. While investing can help boost your savings, it can also be used to generate an income. Different investments can help you to achieve different goals.
It is also important to consider your risk tolerance. Markets rise and fall, and a return on your investment is not guaranteed. You should invest in products that you feel comfortable holding, even if the market may dip for a period of time.
Vantage West offers several investment products to meet your needs, including Certificates (CDs), high yield money markets, IRAs, and IRA Certificate (CD) accounts.
6. Rewards Checking and Credit Cards
An easy way to earn extra cash is to have the payments you already make work for you! Some institutions offer rewards checking accounts and credit cards, which earn you points every time you make a qualifying purchase. These points can then be exchanged for cash or other rewards, and you can deposit the cash into a savings account if you would like.
Check out our Premium Rewards Checking account, which offers both dividends and reward points on all qualifying purchases1.
We also offer the Vantage West Connect Rewards Visa Signature, which gives you 5% cash back2 on a category of your choice , 3% on gas, 2% on groceries, and 1% on everything else.
Want to get your finances in order, but don’t know where to start? Or perhaps your financial situation has changed and you need to determine if your savings plan needs adjusting. Set up a free Financial Consultation at your preferred branch with a Relationship Banker and we’ll go over your financial goals and what may be holding you back from achieving those goals.
Card type and APR is based on creditworthiness. All loans are subject to credit approval. Some products and services are subject to approval. Membership required. Certain restrictions may apply. Federally insured by NCUA.
1 Cash Back rewards are tracked as points and each $1 in Cash Back rewards earned is equal to 100 points. Points can be redeemed for cashback, merchandise, gift cards, travel, and charitable donations. Must have a minimum 2,500 points for cash redemption. A “Qualifying Purchase” is non-pin merchant transaction. We reserve the right to determine at our sole discretion whether a particular transaction is a Qualifying Purchase or to include or exclude other charges from the definition of Qualifying Purchases. See Vantage West Rewards terms and conditions for details and restrictions of the program.
2 Capped at $1,500 spent in qualifying purchases quarterly