Saving money isn’t all about accumulating as much wealth as you can by counting pennies and using coupons. It can help you achieve short and long-term goals. Saving can also help you ensure you are prepared for emergencies.
For our purposes today, let’s focus on what it takes to create an Emergency Fund so that you have enough money saved for “rainy day.”
Step 1- Open a Savings Account (If You Don’t have One Already): by opening a savings account you are separating this money from what you’ll use for purchases. Choose your savings account based on the following factors:
- Fees and limitations– most savings accounts of restrictions on minimum balances and withdrawals. Be sure you know what these are.
- Interest- this allows your money to work for you. A general rule is that the higher the interest rate, the higher the minimum balance you’ll have to keep in the account.
- Accessibility- can you withdraw or transfer your money at any time, or are there limitations?
- Benefits– can you access your money through ATMs, Online Banking or Mobile Banking?
Step 2- Set Your Savings Goal: an Emergency Fund should cover three to six months’ worth of expenses in the event you lose your job or become temporarily disabled. Once you have your overall goal, set smaller goals to better gauge your progress and to make the task of saving seem less daunting.
Step 3- SAVE! Transfer your set amount from your checking account to your savings account every time you get paid. Better yet, use Online Banking to set up a recurring transfer for this amount to occur every payday. This helps in two ways: 1) it ensures you are actually saving, and 2) it eliminates the chances of you deciding to use that money for something else.
Putnam Bank makes it easy for anyone to save their way by offering multiple savings accounts. This ensures you will find a savings account that closely matches your needs. If you have any questions or would like to open a savings account with us, simply come by any of Putnam Bank’s locations today.
Putnam Bank, Member FDIC and Equal Housing Lender