Donell Edwards, Blogger
About Donell Edwards: Donell Edwards is President of CWR Media and is also founder and publisher of The College World Reporter (CWR) magazine and CWR World News & Information Service. He is also a professional speaker, freelance writer, and entrepreneur.
Know Your Money
Friday – May 16, 2014
Knowing Your Personal Finances
Special Savings Series: Making the Most of Your Savings
By Donell Edwards
During this special series we have discussed what it takes to get a savings plan started, the importance of debt management, the benefits of creating additional income streams, and savings strategies to motivate you to save and to help you start and continue to save regardless of how much or how little you may have to save. Our intent has been to provide you with information to help you change your thought process about saving and to help you have the confidence that you can become a saver.
In his classic, War and Peace, Leo Tolstoy writes, “The strongest of all warriors are these two — Time and Patience.” No words could better describe what it takes to become successful at personal money management. Because it takes time and patience to learn to change one’s thought process, to be willing to change, to understand the importance of self-sacrifice, and to overcome bad habits. It takes time and patience to monitor and evaluate spending and to take action on what the results of those activities reveal. It takes time and patience to establish a realistic budget and to learn to live rigidly within that budget. It takes time and patience once spending is monitored and a realistic budget is implemented in order to learn to resist the temptation to splurge and waste money. It takes time and patience to develop the willpower to make sacrifices in order to pay down debt instead of continuing to incur additional debt. It takes time and patience to get to a point where one can replace credit spending with cash spending, or to learn to do without. It takes time, patience, and courage to get to a point where one can save.
If you are somewhere in the process working toward positioning yourself to save, you are to be commended. You are making progress on the long road to success. If you have already arrived at the point where you can save, congratulations, you are ready to make the next step. Whether you are working toward being able to save and the rest of this post is motivation for you to continue your efforts, or you are ready to take the next step and can use this information now, take note of how you can make the most of your saving.
One of my great concerns when I decided to write this series about saving, and in other posts that I have written about saving, was where to recommend readers to save. Since the interest rates at most banks is so very low it is almost not worth even putting money into them, the question was where is the best place for savers to save their money?
In doing research I discovered that credit unions generally pay more interest than banks. In one of our Must Reads for today, Highest Savings Account Rate Is 40X the National Average, there is a comparison chart that shows the average savings account rates over the past year for banks and credit unions and the national average, and the change from last year. The article also lists the 10 best savings accounts based on data from the GoBankingRates database. So, credit unions are a good choice.
For those in the military, United Services Automobile Association (USAA) is a good option. This company provides banking, investing, and insurance services to people who serve or have served in the military and their families.
Another option is to purchase Certificates of Deposit (CDs) if you are prepared to leave the money in the account for at least 6 to 12 months. Since you should be saving for the purpose of creating an emergency fund or to accumulate enough money to invest, leaving the money in the account for up to a year should not be a problem. In some cases the interest on CDs may be higher than the interest in banks.
So, do your own research, and look for the best deal. Also, make sure to read the fine print because there may be penalties for making more withdrawals than allowed, there may be penalties for failing to meet the minimum balance requirement, and there could be other hidden penalties or fees.
Be sure to read all of our Must Reads for today in addition to the highest savings rates article. The other two articles, 10 Best Ways To Earn More Interest On Your Savings and How Lottery Savings Accounts Fool You Into Saving More will provide you with additional information on how to earn more on your savings as well as how to stay motivated to save.
Have a great and money wise weekend.
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Disclaimer: I have a Bachelor of Business Administration degree but I am not a financial adviser. However, I have acquired years of knowledge about personal money management through my life experience working through my own personal finances that allows me to share that knowledge with readers of Know Your Money. The Know Your Money Blog posts written by me are my own common sense observations and opinions and are for informational use only. Although my blog includes contributions from experienced financial professionals, please make your own financial decisions based on personal research or contact a financial adviser.
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