Planning Your 2021 Savings Habits
2020 has been anything but ordinary. The COVID-19 pandemic has taken an economic and emotional toll on the entire world, causing the cancellation of events and trips for nearly an entire year, with more to come.
With news of vaccines and treatments nearing their availability in 2021, people may begin starting to plan for a big 2021, making up for lost time and events that were cancelled in 2020. Of course all of those fun activities cost money, so you may want to start your planning now.
In this blog post, we’ll go over some simple tips to save up some extra spending money for what 2021 promises.
Start a Budget if You Don’t Already Have One
If you don’t already maintain a budget, now is the perfect time to start! Having a grasp of all of your income, expenses, and disposable income will help inform what you have the capability to put away for whatever you’re saving for.
A budget will help you keep your finances organized so you can set realistic savings goals so you can save up for that next vacation or big purchase you are planning. Get in the habit of putting a certain percentage of your paycheck into a savings account. Better yet, see if your employer can direct deposit part of your take-home money into that dedicated account.
Get into the Habit of Saving in a High Yield Savings Account
Sure, putting money aside in a savings account will help you silo your money, but not all savings accounts are created equal.
According to the FDIC, the national average interest rate for savings accounts is just 0.05% APY. Let’s say you deposit $250 into a new savings account with 0.05% every month for a year, you will end that 12 month with a balance of $3,000.75, with the yield from that savings coming out to a whopping 75 cents.
A Smart Saver account from Consumers Credit Union is the perfect place to store your savings, yielding more return. Our Smart Saver account lets you save up to $1,000 a month with up to 1.50% APY. That rate is 20 times better than the national rate for savings accounts, ensuring your savings work for you! Using the same example of $250 being deposited every month, your APY would yield you $22.55.
Take Advantage of Credit Card Rewards
You can be strategic about the type of credit cards that you use to put your money to work, on purchases you are already making.
Certain types of credit cards reward your usage with things like travel miles or other gifts, which come in handy when making big plans for 2021.
Consumers Credit Union’s Visa Signature Rewards Card offers rewards points on every purchase, with bonus points for groceries and gas purchases. Every purchase goes a long way towards helping you plan that next vacation, or find the perfect gift for yourself or others.