After the stock market crash of 1929 a lot of people decided that the best thing to do with their money would be to stash it under their mattresses. The belief that money is best saved outside of a bank is easy to understand, what with the market crashing every few decades. Still, measures have been put in place to keep people from losing their shirts and now banks are the best place to keep your money.
You can start by opening a savings account.
Do some research to find out which bank has the best rates on savings accounts. You want to find a bank that will offer you a high and compound interest rate. The compounding part of your interest rate is important. With a compound interest rate, the interest your deposits earn over the course of the year gets added to the capital on your account, allowing it to earn even more interest. This, along with regular deposits can help you set up quite a nice retirement fund for yourself when you need it.
Pro Tip: If you work with and need to deposit large amounts of cash, using a bank that does everything by hand may be a bad option. Make sure you use banks that use tools like Hampton Security or a similar entity to ensure accuracy when counting your deposit. The less chance of human error, the better!
Saving Up As Much As Possible
There are a few easy tricks that you can use to pad your savings account as much as possible.
1. Set up regular and automatic deposits from your checking account to your savings account. This way you will be adding a set amount to your account every week/month and you won’t have to worry about remembering the deposit.
2. When you set up your budget pad each budget item by ten to twenty dollars. This way if a monthly bill comes in at slightly more than usual you’ll be covered and won’t have to dip into your savings account for the money to pay the bill. If the bill comes in at less than what you’ve budgeted, put the overage into your savings account. Remember, every penny matters!
3. Learn how to reduce expenses and live more cheaply than you’re living right now. Buy generic products instead of brand name. Make more of your food from scratch. Utilize the services at your library, that kind of thing.
Don’t Forget to Invest!
Take a portion of each paycheck (no more than you can afford to lose) and invest it. Work with an investment professional to help put together a solid and varied portfolio. Every quarter, if your investments make money, you’ll receive a check with the profits. Deposit that check directly into your savings account. This keeps you from being tempted to invest more than you can afford to lose and beefs up your retirement/vacation fund even further.
Saving up for retirement, that huge vacation, etc looks difficult when you are first starting out and taking stock of your monetary situation. As you work, though, you’ll see that it really isn’t that hard. It’s mostly just keeping track of a few details. Everybody is capable of that, including you! Good luck!