by Anika Woelffer
As you get older, putting money away for your future continuously becomes more important. Although it's far ways away, the faster you can start saving money and putting it away, the more money you will have in the future. Saving is the process of putting money into a secure bank account that is unspent or used. There are many different types of accounts you can open up, but one isn't necessarily better than the other. When saving, I'm not only talking about retirement plans, but as well as vacations, money for your grandchildren, house payments, and debt. If you save early and start investing at a young age, your chances of having millions of dollars in your savings account increase drastically once you retire. Not only is it important to save, but it’s also a necessity. Over time the money will grow through interest, the interest isn't a large percent (normally 0.06%), but the longer the money sits there, the more you will have when you decide to withdraw it.
According to the graph from the website Money.com, it is easily identifiable that 1 of 3 Americans don't have any savings for retirement. This percent is huge when you realize the importance of saving. Not only does savings guarantee that you will be financially stable in the future, but it also can impact future generations of your family. No matter what current state of life you are in, saving money will always be beneficial. It is better to start early, so in the end, you will have more money put away but any contribution will put you steps ahead of a ⅓ of the population.
Saving money can be easy, and opening a savings account can be done practically anywhere. It's even easier nowadays because you can set up an account online! From the website Nerdwallet, it states, “ Using a savings account creates some distance between everyday spending money, kept in your checking account, and cash that's meant for a later date, like an emergency or a vacation.” Not only do plans motivate someone to save, but it will also guarantee that you will have money put away in case of emergencies. If you don't like the idea of a savings account there are alternative ways. First of all, there is a certificate of deposit, this is a timed deposit, but you will earn more interest in the end. Unlike a traditional savings account, the interest for a CD can go up to 3% (depends on the bank) while a savings account is 0.06%. The CD works similarly to a savings account, but the main difference is you can't take out the money until your “contract” is up, and there is an increased interest rate (Investopedia.com). Another way to save is a money market account. The purpose of this account is to be a “happy medium” between checking accounts and bonds. They have limits on withdrawals as well as higher minimum balances, plus they have higher interest rates at 2% (Bankrate). Now, one may be wondering “What account works best for me?” This is 100% based on your needs, if you are putting a large amount of money away for a long period of time, the CD would work best. If you want to access money in a faster amount of time and aren't worried about it growing much, then a savings account would work best. Lastly, the graph below shows the pros and cons of comparing a traditional savings account, CD, and MMA.
In conclusion, not only is saving important, it is a necessity. It will provide a better and stable future the early you start. As mentioned before, saving is as easy as going to the bank and opening an account. Understandably, people might struggle with saving, but every little bit helps. What method do you think you would do? What are some reasons people might struggle to save?
Works Cited
“1 In 3 Americans Has Saved $0 for Retirement.” Money, money.com/retirement-savings-survey/.
“5 Best Money Market Account Rates for September 2020.” Bankrate, www.bankrate.com/banking/money-market/rates/.
“How To Save Money Fast: 100 Ways to Save Money.” The Simple Dollar, 6 Aug. 2020, www.thesimpledollar.com/save-money/little-steps-100-great-tips-for-saving-money-for-those-just-getting-started/.
Karl, Sabrina. “What Is a Certificate of Deposit (CD)?” Investopedia, Investopedia, 29 Aug. 2020, www.investopedia.com/terms/c/certificateofdeposit.asp.
I'd definitely can admit myself that saving money for me, at least is kind of hard especially since you want to spend it so quickly on clothes, makeup, nails, etc. I'm very intrigued at the many different savings account that there are out there. Most importantly after reading your article I'm interest to know, what is interest? What does it mean when a percent gains a percent of interest from their savings account? These are a couple of questions that myself is wondering, especially because you don't know whether or not interest could be good or bad.
ReplyDeletei feel like saving money is a very underrated topic to discuss when you are older in life because alot of people actually dont have money saved up for retirement and such or just savings money. but savings acconuts are critical in having enough money and keeping it safe. i feel like you should have discussed how to start to make a savings accont rather that what types of accounts are out there. but still informative in what banks have to offer.
ReplyDeleteI always feel like it's a lot harder to see your already small paycheck turn into something even less when you contribute to your savings account. But I agree - this is so important to do. I have a friend who goes to our school who has over $15,000 in investments that will help her pay for college and other things of that sort. All of this money was just because she saved some of her work paycheck and put it aside! Now, I'm jealous of her because I wasn't as financially responsible as her when I got my summer job because it clearly 'paid-off' in the end.
ReplyDeleteIt's nice that you put a visual of the pros and cons between the different short term savings options. It's a great way for people to determine whether a savings account, money market account or a certificate of deposit is right for them. I also thought you did well in explaining why saving is so important for the future. It's unfortunate that 1 in 3 Americans have no retirement savings and I wonder how difficult it is for them when they retire.
ReplyDeleteSaving is such an important topic to cover, so thank you! I think for saving I really like the 50/30/20 method. I think it's a way to make sure you have enough money for all of your bills while still making sure you have money for fun things and savings. I think for me right now a Savings account is the best because if I need it I can access it, and I don't need it growing a whole bunch right now. I think people might struggle to save because they either have a lower paycheck, or are still paying off loans or new payments that you have to put more money towards.
ReplyDeleteI feel like one of the most important things you talked about was saving and investing as soon as you can is going to help you in the long run. It is going to be even more important for our generation to start saving for retirement because of possible inflation. That is why i'v started talking to my parents about starting to invest now.
ReplyDeleteSaving for me is a bit not difficult because, I put most of my money on my family each month as that's what's more important to me. Although I am losing some of my money, as long if I am making someone else happy,it makes myself feel happy too. The blog was very interesting to read, as learning about savings is very important for most people in the world during this day. Savings is a huge part in our life, as we all want to have a lot of money growing up at whatever age.
ReplyDeleteI still think it's so crazy how early on in our lives we have to start saving for something that seams so far down the line but in reality its not. Great work Anika!
ReplyDeleteSaving money is a hard concept for people to understand in our age group as we don't really think about the future and how much everything costs later on in life. You did a good job providing a simple yet informative explaination on why we should start saving now and the importance of doing it when we can. Even though you did do a good job explaining what and why saving is important, I feel that you could of gone a little deeper on the different ways to save such as different types of savings accounts. Also the infographic you provided on the pros and cons of savings accounts, CD's, and money market accounts was very infomative, I feel that you could of explained a little further what each account was and how it can benefit you in the future. Otherwise, you did a good job writing a blog post on something specifically targetted for our age group.
ReplyDeleteLuckily, I already have a savings account of my own and I have had it since I was 7! This has helped build some interest, not a ton, but better than nothing. Also, I do have access to my savings account, for example, I can transfer it to and from my debit card, but once I put money in my savings accounts I don’t like to touch it. I could spend all of the money I had, but personally I think it is “unsatisfying,” so I don’t touch it. Once I get it to a certain amount, I don’t let my savings go below that amount. I think that this is something that people sometimes struggle with though because people just want to spend all the money they have because they are young and don’t need to pay bills or pay off debt. This will obviously not help them in the long run because all the money they saved will be lost. Therefore, I think that starting a savings account and making it one you can not touch is smart so that people do not spend every penny they earn.
ReplyDeleteReally good job Anika! One thing that really caught my attention was how you said one in every three people doesn’t have savings for their retirement. This is really sad to think about because as you get older, it will just become harder to pay for. One thing I want to work on for the future is growing my savings account by adding money into it monthly because then I will grow the account and it will help me for the future. Do you think people don’t have savings accounts because they think they don’t need one or are people just becoming lazier. I think it is a mixture of both as people don’t feel the need to save money because they already feel like they have enough but I also think peoples perspective on money as the years go on is changing.
ReplyDeleteYou did a really great job with this article! I feel that saving money is definatly something that we should be educated on at this time of our lives. This article did a great job breaking it down and how it was so important. I can admit that sometimes it's hard for me to put my money away for my future, but if
ReplyDeleteI start to utalize the 50/30/20 meathod than I might have more success. It's crazy to me how early we have to start saving for our future.The images you used were very helpful and connected well to your writing. Overall, great job Anika!
Even though savings was taught to me at an early age it is still hard for me to save money sometimes because of the different things that is available to you. With the online savings available with a press of a button everyone should be taking advantage of it so that you have a peace of mind of your money.
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