You have been hearing about why you need to save since you were a small chap.
“Save for that new game” (it was likely Sonic the Hedgehog or that new 2K) or “save for those new sneakers” (Momma ain’t have money for the ones you wanted) … back then and now — there’s always something to save for. Anyway, we have been hearing about saving all our lives and the list of reasons keeps mounting as we age. I remember when my parents set me up with my first savings account at roughly 10 years old — just to get me used to it. Mind you, I didn’t even care about it … I had moneyyyy! While I am grateful, looking back I realize that savings account didn’t actually pay me anything.
You read that right.
Most savings accounts pay pennies for you letting them hold your own money (go pull your statement right now, I’ll wait).
While it’s a cute tactic, you aren’t really seeing a solid return on your savings for keeping it there. Even if you save a good chunk, the kickback that banks provide you with is chump change — no pun.
So, allow me to introduce to you the ever-so-handy “high-yield savings account.”
The tea is that these accounts pay YOU more for allowing them to hold your money. I’m all for the old school method of storing your coins in your bra or under the mattress, but you’ll need a high-yield savings account to see your money really grow. Most of them can be started with a little as a dollar or a penny!
Even Sallie Mae has one, YES, that Sallie Mae.
Some of my personal favorites include Ally, Goldman Sachs/Marcus and American Express. Here, Bankrate has a list of great ones to choose from.
You can open up several to create saving buckets. With savings buckets, you give each of these savings accounts a purpose or a job. Don’t stress yourself out with opening up 10 and getting frustrated. Slowly build up your savings strategy; just as you can snowball to pay down debt, you can reverse that method to build up wealth and savings. Start with 1-3 savings accounts and give them a name! I personally have some tagged as F*U money and one for Amazon stock.
Tips for letting your savings strategy build:
– Open up a High Yield Savings account – even if it is just one.
– Take a look at your expense account/budget and see how much you can invest into that account daily, weekly or monthly.
– When you get the hang of it – set it and forget it. Start small so you will get used to it and you will not notice it. Trust me, it will happen. Most banking institutions allow you to set up automatic transfers to internal and external banks (you only need the routing/account number from your high-yield to get it rolling like dice).
– Build shawty, build. Don’t stay stuck at $5 a month or week – increase it at least every quarter. This gives you time to see the growth. But, when you see how that joint adds up – you’re gonna want to bump that amount up.
Appsolutely: There are savings apps that do this for you, BUT they aren’t interest-bearing accounts. I recommend Digit ($3.99/month), Acorns (you can even invest!), Qapital Clarity Chime, all of whom source from most banking institutions. Research before you jump!
