Would you like to have $25,000 in your savings account? You can achieve this savings goal in a single year by sticking to a budget and savings plan. (iStock)
Saving $25,000 in a single year may seem like a daunting taskbut it’s an achievable goal if you create a budget and follow a savings plan. From trying to boost your emergency funds for expenses like medical bills and home repairs to taking a dream vacation or saving for retirement, allocating $25,000 to your savings each year can help you achieve many of your financial goals.
Consider these savings strategies which may help you save $25,000 each year:
- Open a high-yield savings account
- Create a budget
- Increase your income
- Reduce your bills
- Enroll in automatic transfers
It’s never a bad time to consider new savings strategies. Visit the Credible marketplace today to explore all of the investment options that can help you save thousands of dollars throughout the year.
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1. Open a high-yield savings account
Before you investigate savings strategies, you should ensure that whatever savings you currently have are growing to their full potential. A traditional savings account typically offers low interest ratesbut APY rates on a high-yield savings account are often substantially higher.
Though interest rates are variable, a high-yield savings account is a low-risk way to grow your money compared to other investment strategies. Currently, APYs are lowbut that doesn’t mean you should wait to open an account. Opening one now allows you to begin growing your money in an account that’s FDIC or NCUA insured. Rates will increase over time and some banks may waive minimum balance requirements or maintenance fees for new account holders.
Credible can help you find a high-yield savings bank account provider and interest rates that will boost your savings. Check out what options — from each banks' minimum balance requirement to its APY — are currently available.
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2. Create a budget
Creating a budget is a wise move to help you meet your financial goals.In order to do this, calculate approximately how much of your monthly income remains after paying your monthly expenses. Then, create a budget to determine how much of this balance you’ll use for personal expenses and how much you can dedicate to your savings.
3. Increase your income
Though it’s easier said than done, any extra income that you can earn could be solely dedicated to growing your savings. There are countless freelance, temporaryand part-time employment opportunities that you can complete online. Simply earning an extra $100 per week will enable you to save $5,200 each year, which equates to over 20% of your $25,000 goal.
4. Reduce your bills
Saving can seem challenging when you compare your current monthly income to your monthly expenses. If you’re unable to generate extra income, you should try to reduce your bills. Small changes like cutting down on water or electricity usage, downsizing your cable planand finding a cheaper auto insurance plan can save you hundreds each year.
If you have outstanding debt, consider refinancing your loans or consolidating your debt so you can allocate more towards saving.Visit the Credible marketplaceto discover how loan refinancing or debt consolidation could help youreach your financial goals.
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5. Enroll in automatic transfers
Growing your savingscan be difficult for those who are tight on time and money. One of the easiest ways to consistently increase your savings is to enroll in automatic transfers. Most financial institutions allow you to schedule a preset amount to be transferred to your savings account at specific intervals, such as once a month. Remember, you can always increase or decrease how much you’re dedicating to your savings to ensure that your other financial responsibilities are continually met.
Final thoughts
The best savings plan for you will be one that doesn’t cause added financial stress. Even if you’re still unsure of which methods will help you achieve your $25,000 savings goal, it’s still wise to open up a savings account and begin earning interest. A high-yield savings bank account can help you substantially increase your savings, even if you only start with the minimum required balance.
Here are a few things to consider when exploring yourhigh-yield savings options:
- Determine how often you can withdraw from a high-yield savings account at your preferred financial institution. Some of these accounts limit the number of times you can take money out and charge penalty fees if you exceed this limit.
- Inquire about fees associated with opening, maintainingand closing a high-yield savings account. Some banks may charge fees related to low balances, service charges, paper statementsand premature account closure.
- Consider opening a high-yield savings account no matter the current interest rates. Though it may seem counter-intuitive, you will likely still receive a rate higher than a traditional savings account and the rate will likely increase over time.
If you don’t want to leave money on the table, maximize your earnings with these high-yield savings options on the Credible marketplace that can help you reach your $25,000 savings goal.
Absolutely, I'd be delighted to dive into the concepts discussed in that article!
Let's break it down:
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High-Yield Savings Account: These accounts offer higher interest rates compared to traditional savings accounts. They're low-risk and often insured by FDIC or NCUA. Interest rates might vary, but they're a safe way to grow money. The article suggests exploring options through platforms like Credible, where you can find accounts with higher APYs, potentially waiving minimum balance requirements or fees for new account holders.
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Budgeting: Creating a budget involves calculating your monthly income after expenses. It helps allocate funds for personal expenses and identifies the portion that can go toward savings.
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Increasing Income: Finding ways to increase income, even through freelance or part-time work, can significantly boost savings. For instance, an extra $100 per week can lead to substantial annual savings toward the $25,000 goal.
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Reducing Bills: Cutting down on various expenses, such as utilities, cable plans, or insurance costs, can free up more money for savings. Additionally, strategies like refinancing loans or consolidating debt can help redirect more funds toward savings.
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Automatic Transfers: Enrolling in automatic transfers allows for consistent contributions to savings without requiring continuous attention. Financial institutions usually offer this feature, allowing preset amounts to move into savings at regular intervals.
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Considerations for High-Yield Savings: When exploring high-yield savings options, it's crucial to check withdrawal limits, associated fees for account maintenance, opening, or closing, and even consider starting despite current low interest rates. Over time, these rates may increase, yielding better returns compared to traditional savings accounts.
The article emphasizes that even if the best strategy for saving $25,000 isn't immediately clear, starting with a high-yield savings account and earning interest is a wise step. It recommends exploring options in the Credible marketplace to maximize earnings toward the savings goal.
Understanding these concepts and implementing strategies aligned with personal financial situations can contribute significantly to achieving a substantial savings goal within a year.
