April 6, 2023
Boost Your Financial Wellness with a High-Yield Savings Account
Having a healthy level of accessible savings can be an ace in the hole for one’s financial portfolio – and provide peace of mind! With high-yield saving accounts gaining in popularity again, now is a good time to revisit the critical role a savings account can play in your financial wellness goals. Here are a few reasons to evaluate your own personal savings and goals to be sure your money is working for you.
- Debt Management: It can be discouraging to have finally paid down a credit card, only to need it for an emergency and see that balance go right back up. Having an emergency savings account allows you to pay that surprise expense with cash and avoid high interest debt.
- Peace of mind: Sometimes, the best return on your money is the good night’s sleep you get with a financial buffer. 41% of adults say their finances are their number one stressor. Get ahead of this and enhance your overall wellbeing by committing now to building your savings.
- Investment protection: One of the best ways to protect your investment account is to have a safety net of cash in savings. Putting all your money into stocks and bonds will theoretically offer the highest return over the long haul, but the last thing you want to do is sell low if you need to tap into those investments when the market is down. And remember, it’s usually when the market is down that your need for cash is highest.
- Short-intermediate term goals: Are you saving toward a car, down payment for a house or a vacation? The stock market may be too volatile in the shorter term (less than five years, minimum) to risk one’s money in search of growth, depending on your risk appetite. Try using one of our savings calculators to plan out your budget.
- Freedom: Building a cushion that gives you the flexibility to jump at opportunities, such as a new job or an early retirement, without needing to worry about the immediate financial impact, can be life-affirming.
One easy way to build up your savings is to set up a monthly automatic transfer from your checking to your savings account and treat it like one of your automatic bills – except you’re paying yourself! Pick a number that you feel comfortable with and can maintain. It’s better to start small with an amount you know you can afford. Make it a long-term goal to save at least three months’ worth of living expenses in an emergency account and you will be well on your way to a sound financial foundation.