A Guide to Saving Money

You've probably heard about how important it is to put money away for the future. You may have even thought about increasing the amount you save every month, but did you know there are several other important components to saving money? The types of accounts you use and the benefits they provide could potentially impact your money's growth and your financial flexibility. Use these strategies to help you save money and achieve your financial goals. 

Separate Your Savings for Short-Term and Long-Term Goals 

It's important to consider how you save for your short-term goals versus how you save for your long-term goals. While you might be tempted to keep cash for all your future financial goals in the same bucket, having separate accounts for each can help you track your progress and stay focused. 

Choose an Account That Provides the Access and Flexibility You Need 

When choosing a savings account, it's important to know if the account provides the financial flexibility and access to your cash that you need. For example, while you may want to lock some of your savings away until retirement, you might need access to other funds sooner. Ask yourself important questions such as: 

• Is there a penalty for withdrawing a certain amount of money or withdrawing before a certain date? 

• Will this account enable you to save up for your short-term or long-term goals? 

• Does the account have the sort of interest rate you want or need to build up savings for the future? 

Consider Spreading Your Savings Among Several Account Types 

An important part of saving wisely is diversifying your funds. This means that rather than keeping all of your cash in a single account, it may be beneficial to spread your savings across several account types that provide different benefits. Some common account types to consider include: 

• Cash management accounts 

• High-yield savings accounts 

• Money market accounts 

• Certificates of deposit 

• Retirement accounts 

Your savings can fall into long-term and short-term buckets, can grow over time to expand your financial freedom, and may be distributed among several different types of accounts. These key facts can help you understand and identify the main aspects of saving money that could help you achieve financial stability.