How to Build Savings
Whether you're looking to save for a down payment on a house, or just for a rainy day, it's important that you pay yourself first. Here are some proven ways to help you prepare for tomorrow - and down the road.
Saving for the Short-Term
Do you have shorter-term savings needs, such as building emergency funds or saving for a wedding or other event? Here are some simple steps you can take to achieve your goal.
- Determine how much you'll need. Are you saving for a specific goal? Or are you saving to plan for unexpected expenses? If it's the latter, experts recommend that you have three to six months of net income in the bank in the event that you lose your job. If you're self-employed or in a profession that is less stable, you may want to have one year's worth of income.
- Control your spending. Here are some simple ideas to help you save.
- Save a portion of each paycheck before you pay the bills. You may even want to have a portion of your pay automatically deposited to your savings account. You can't spend what you don't see.
- Save your next raise.
- Save extra change.
- Save the money you spend on treats and on coffee.
- Cut coupons.
- Save your tax refund.
Saving for the Long-Term
At Metro, we understand that some of your savings goals may take longer to achieve, such as retirement or a down payment for a home or car. But with a little discipline and some smart choices, you can achieve your goals.
The right account can make all the difference.
The first step in saving for a long-term goal involves choosing the right savings vehicle. To do so, you must assess your savings timeframe, need for liquidity, and tolerance for risk. For longer-term needs, such as college or retirement savings, you may want savings products that hold your money until a specified maturity. If you won't need the money for at least five years, consider stocks, bonds or mutual funds.
If you have longer-term goals such as these, you should speak to a financial consultant or planner, who can review your individual goals and recommend the best course of action for you.
