Net Savings! A Guide to Saving Money


Saving money gives people a measure of security that also provides more opportunities. The old motto goes “Pay yourself first,” but many people have not yet gotten the memo. Studies show that 28 percent of people have no emergency savings and 25 percent have no savings at all! Having savings stashed away gives people freedom, so it is important to develop proper savings strategies.

The Importance of Saving

Savings are important, because no job is 100 percent secure. Whether a person works for a company that has been around for 60 years, or has launched their own upstart business, savings will allow one to  take calculated risks.

That emergency medical bill or car damage can also seem a lot less scary when a person has been diligently stashing money away every single pay check. Outside of emergencies, people who work hard deserve to have some money to keep for themselves, rather than giving it back every month. By paying oneself first, they will have something to show for their labor outside of items accumulated while living check to check.

For best results, a person should begin saving in their 20’s if not earlier. This less stable time is the best period for a person to begin setting the tone for the rest of their financial life. Developing these habits at age 21 will allow a person to have significant money stashed away that will prove beneficial when retirement age rolls around. Proper savings strategies will also allow a person to enjoy travel and leisure without having to worry about spending irresponsibly. While it is prudent for a person to begin saving early, it is critical to realize that it is never too late! Whether someone is 15 or 75, it is crucial to formulate savings plans.

  • Saving Tips – This piece details 99 useful ways for a person to learn how to save money.
  • Savings Fitness – The Department of Labor issues a guide on securing ones financial future.

Types of Savings Accounts

When a person makes the sound decision to begin saving money, it is important to gain an understanding of what opportunities are out there. With most banks, there are three key options:

  • a basic savings account
  • a certificate of deposit
  • a money market account.

A basic savings account is 100 percent liquid, giving account holders the opportunity to access their money at any time. They usually require a low minimum balance, with credit unions offering entry balances as low as $5. The interest rates for these accounts are low, currently hovering in the 1.00% to 1.50% per year range.

Certificates of deposit, also referred to as CDs, are savings accounts that feature higher interest rates over a fixed period of time. A person places money into this account, cannot readily withdraw money and allows their investment to grow over a particular interest rate until the account matures.

Money market accounts can earn high interest rates, usually have less checking privileges than standard savings accounts and feature higher minimum balances, typically $2,000 or more. Understanding these accounts will allow a person to save and invest wisely.

  • Checking & Savings Accounts – This site from the U.S. Department of the Treasury features terms and information about savings and checking accounts.
  • Savings Accounts – This thorough report features discussion on the various types of savings accounts and the terms and interest rates a person can expect.
  • Examples of Savings Instruments – The Department of Education lays out a chart that explains terms of every major savings account type.

Ways to Save: Great Tips for Saving

People who want to get better at saving have a number of practices they can follow that allow them to save money on a regular basis. The biggest way to save money is to have a certain percentage of every check that will be saved, and sticking to it. By vowing not to touch this money, a person will be able to build savings that allow them to breathe easy.

Another quality way to save money is to buy groceries and stop eating out so much. People would be surprised how much money they could save if they shopped for groceries, cooked meals at home and survived off of that, rather than dropping $8 to $10 or more on fast food every time they get hungry.

Next, keep an eye on the utilities. By using the air conditioner and heater less often, people will also save more money on their bills, especially during the extreme months. Each month, people should also carve out a budget, and make sure they do not spend over it. If it is hard for a person to save, they should contact their bank and set up automated savings transactions, so that money is taken out automatically every so often, foregoing the chance of forgetting. It takes diligent action in order to develop savings, so people should explore every avenue available.