*Post was updated in July 2019*
If saving money is one of your goals for 2019 – there is an effortless yet highly effective way to make this goal possible with two very simple steps:
#1. Make your savings AUTOMATIC – Schedule automatic monthly deductions of $100 from your checking account and into HIGH YIELDING savings account per paycheck or each time you get paid starting this month.
#2. Chose an FDIC insured savings account that pays you the highest interest rate possible. More on this below!
First, of all – If you have a savings account paying you pennies on the dollar (ie:. 0.06% or less), it is time to move your money immediately. If you don’t have a savings account just yet – let this be the year you open one and make your savings automatic!
I am personally a HUGE fan of making finances automatic especially when it comes to savings. Think of it as a “set it and forget it” way to pay yourself first. Otherwise, it can be quite difficult to save. Automatic is the way to go.
Think about it – by the time you get your paycheck – everyone and their mother has already taken their part – Uncle Sam, the city or state where you live, Medicaid/Medicare, and countless other entities. All of this happens – you guessed it – automatically!
The next payment after all that should be going to contributions towards retirement accounts at work (if you have one) and/or to your own personal savings account. Call it “The Bank of [Insert Your Name Here]”
While the title of this post says “$1,000” you can tailor the steps to pretty much any goal you have when it comes to the dollar amount you’d like to have in savings by the end of the year. It can be more than the $100 noted if you’d like to save more.
Many people wonder how much money they should have saved. I strongly believe the answer will depend on your situation.
Most personal finance “gurus” recommend having at least 3-6 months worth of living expenses in an emergency fund. While this is a good ballpark, I understand the amount can understandably feel quite overwhelming for someone just starting a savings habit.
What I always tell people is to work towards having *AT LEAST* $1,000 in a savings account. Once you reach $1,000, work your way up from there until you have at least a few months of living expenses covered.
Work towards having at least $1,000 in a savings account and then work your way up from there.
In terms of where to get the highest interest possible on your savings, the good news is that we are living in some amazing times with banks offering pretty competitive rates.
My top two favorite banks for savings are listed below, in order of interest paid from highest to lowest:
CIT BANK –
The highest interest rate I have seen to date is CIT bank Savings Builder program which pays 2.30% interest as long as you are enrolled in ongoing monthly deposits of $100. I wrote a full post on how this program works a few months ago.
This is quite an incredible way to accumulate money fast and efficiently.
You can learn more and enroll in their awesome savings builder program here.
Note: For those wondering – CIT bank is not the same as Citibank :).
GOLDMAN SACHS MARCUS –
Some of you might recognize Goldman as the creme of the crop investment bank. However, the business has branched out into consumer services and has done it incredibly well. In the fall of 2016, Goldman opened the doors of “Marcus” with some pretty awesome interest rates.
As of the time of this post, the bank is offering 2.15% on savings!
If you set up automatic deposits of $100 per month for the next 12 months, you’ll have OVER $1,300 by the end of the year (at the 2.45% interest rate). Plain and simple. If you can comfortably save more than $100 a month, I’d encourage you to get more ambitious with your savings goal.
If you’d like some motivation to save more than $100, check out how much money you would have by the end of the year depending on how much you save monthly:
Note that both of the banks I mentioned are online banks with no brick and mortar branches which is actually good news. They can be used strictly for savings and it won’t be convenient for you to move money in and out of the account whenever you feel like it. Yay for built-in accountability!
And that’s all folks! If you are reading this and aren’t sure how to open a savings account, how to get started on your saving goals for this year, or have any questions in general – email me at Girlsonthemoney@gmail.com I’d be happy to help you.
Have an amazing day and cheers to a great 2019! Thank you for reading.
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