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Nearly three-quarters of Americans have financial regrets, according to a recent report by Bankrate.com. The number one regret? Not saving for retirement sooner. Here's how you put yourself in a better financial position than 75% of Americans…
Maintain Your Capital and Its Value
Sure, savings account interest rates are low, but with a savings account, the goal typically isn’t to earn a good rate of return. The goal should be maintaining the value of your money. In a checking account, inflation is slowly eating away at the value of your hard-earned money.
According to inflation data, average annual inflation in the United States is approximately 2%. That means the $100 in your checking account today will be worth $98 this time next year — unless it’s earning interest in a savings account.
Out of Sight, Out of Mind
It’s easy to avoid spending all of your income if you automatically set aside a portion of your income before you have a chance to spend it.
A separate savings account at a separate financial institution ensures you can't easily access your funds online or from an ATM. Limiting access to your money encourages you to learn to live on what money you have available in your checking account.
It might sound simple, but what’s out of sight is out of mind!
Get Control Over Your Finances
It takes discipline to maintain a savings account. The simple task of deciding on an amount to transfer into your savings account gets you thinking about your finances and forces you to budget.
A separate savings account is a smart way to discourage reckless spending and encourage financial stability and sound financial habits. It's surprisingly easy to get ahead of the 75% of Americans who are falling short when it comes to saving money.
If you don’t have a separate savings account, take advantage of our savings account comparison tool below to open yours today. Choose an institution offering a high APY (annual percentage yield) and note the minimum deposit required to open an account.
The whole process takes about fifteen minutes, but it’s well-worth the investment of time.