How & Where to Save
By: Alicia Bauman, Woodland Bank Loan ProcessorS
We all know we should save money. To help pay for our future needs or wants, but how much should we save? And where should we put our hard-earned dollars?
Woodland Bank Credit Analyst Krisitian Bjerk recommended to aim for 50 percent of your salary to go toward needs, the other 30 percent to wants and the remaining 20 percent to savings.
“Don’t stess if you don’t fall exactly into this category,” Bjerk said. “As long as you are accounting for some of your salary to be set aside for savings, you are on track.”
And it’s never too young to start saving.
Bjerk this spring went into a King Elementary first-grade classroom in Deer River, and talked with the kids about saving money. Each child also got a Woodland Bank piggy bank to help them start saving.
“The kids were very interested and eager to learn,” Bjerk said. “I felt like I was making a positive impact on them.”
FDIC Consumer News recently came out with some ideas on where and how to save efficiently. Their first idea was, review how and where you are saving for retirement.
The article stated options included workplace retirement plans, Individual Retirement Accounts (IRAs) offered by many banks, including Woodland Bank and investment companies, and the U.S. Treasury Department’s new “myRA” (myRetirement Account), which is a simple safe and affordable savings program to help individuals start saving for retirement. The article continued, the myRA program offers a new type of Roth IRA, guaranteed by a new U.S. Savings Bond that costs nothing to open and carries no risk of losing value. Because myRA accounts do not have minimum contribution requirements, savers can contribute the amount that best fits their budget. To open an account or learn more about the myRA program, including eligibility requirements, go to www.myra.treasury.gov or call toll-free 1-855-406-6972.
Another idea FDIC Consumer News came out with was, set savings goals for specific reasons.
“Designating accounts that you will regularly contribute to for a particular purpose, such as for a vacation or the next holiday, will help motivate you to meet your goals by a certain deadline,” said Luke W. Reynolds, Chief of the FDIC’s Outreach and Program Development Section.
Woodland Bank offers a variety of club accounts that could help you to achieve this goal. A few to name include: a vacation club account, a school club account, a home improvement club account and a Christmas club account. Setting up an automatic transfer to this account that happens each paycheck or once a month, can make setting aside money simple! Once a year, depending on the type of account, Woodland Bank will disburse the funds to you.
Certificate of deposit (CDs), which provide a predetermined fixed- or variable-rate interest payment for a set time period (usually three months to five years), also may be an option. Kasasa accounts at Woodland Bank could also help you achieve this goal. If you meet the monthly requirements, some of the rewards could be up to $9 cash back or refunded ATM fees up to $20.
The third way FDIC Consumer News suggested how to save was by cutting expenses. They stated a great resource for ideas on how to use your money wisely is MyMoney.gov, the U.S. government’s main website about personal finances with information from more than 20 federal agencies, including the FDIC. Start at the “spend” page.
FDIC Consumer News, also urged consumers to have enough money in a federally insured deposit account to cover three to six months of essential living expenses. They stated that if you don’t have that much in your “rainy day fund”, consider adding funds from a tax refund, an inheritance or other new-found money.
“This can help when unexpected expenses happen and can help when there is a disruption in your income,” Bjerk said.
Don’t hesitate to contact any Woodland Bank employee with any of your financial needs. We have offices in Cohasset, Hill City, Deer River and Grand Rapids.