By Ana Gutierrez
I often find myself daydreaming of all the places I could travel after graduation. The one thing that pulls me back down to Earth is asking myself: “how much do you think that would cost?”
Saving money is always something that has been enforced to me by my first-generation immigrant parents. A hard-working, do-it-yourself ethic is how I was raised; even at the young age of nine, my parents told me that if I really wanted a pet I could save up and pay for it myself. So, I broke my first piggy bank to buy a small, hairy dog that continues to be the purest, most joyful of all my family members.
I like to think of that first piggy bank as my introduction to the importance of saving. Being able to adopt my first pet showed me that if I saved money, I could accomplish some pretty cool things.
So then, why not do the same for the bigger things I want to accomplish? Opening a savings account is the same concept as a piggy bank, except maybe even better.
When you open a savings account you are not only storing money securely, but you are also earning interest. That basically means that you are getting paid to trust them with keeping your money.
A couple steps you should take when considering what bank to open a savings account in include:
- Make sure the bank offers account insurance; most are federally insured up to $250,000. The Federal Deposit Insurance Corporation ensures that no bank account holder loses any amount of insured cash.
- Look at different interest rates; high-yield accounts offer higher rates but can have different requirements, like minimum balances or restrictions on deposit sizes. This can make the difference between earning $1 and $100 of interest over one year.
- Watch out for extra fees; most banks charge fees for going over the maximum number of withdrawals from a saving account per month. You should also keep in mind that you should NOT be paying a bank to put money into your account.
- Make sure that the bank offers an easy way to check the balance. This is more of an optional step, but I find it convenient to have access to seeing how much money is in my account. This can include mobile banking services, online withdrawals, local locations, ATMs, or other user-friendly ways.
Once you have taken these steps, opening an account and saving are the next steps. On your journey to save, you should remember that making a budget and sticking to it is one of the most important steps to saving and earning.
Business Insider suggests the 50-30-20 plan, “meaning 50% of your income goes toward necessities like food and utilities, 30% goes to splurges, like an outing at your favorite bar, and 20% goes straight to your savings account.”
Setting up automatic deposits to your savings account is a step further and makes saving easier too. This way money from your paycheck will be automatically deducted before the rest is put into your checking account.
So whether it is buying your first pet, or paying for a vacation trip, opening a saving account can help you reach your dreams. All you need is a little money and some motivation to get you there.
Gutierrez is a sophomore studying journalism at the University of Missouri.