 Personal & Family Finances - Building a Budget |
The Power of Compound Interest in Your Savings AccountHere's a brief video that demonstrates how your money grows in an interest bearing account.
That video actually uses a very conservative low interest rate. Think how much more your money would grow if you were getting closer to 5 percent.
Don't be afraid to use online banks as long as your account is FDIC (federally) insured.
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Start Budgeting for a Savings Plan To Set Up Your Emergency FundHaving a good chunk of money set aside for emergencies has always been a good idea. But now, with the economy so uncertain for many months to come, that good idea becomes a necessity.If you already have such a fund, congratulations and keep adding to it. But what if you don’t. How much should you have? How will you get there? An amount that will cover at least three months of expenses is the recommended minimum. Those base expenses include: monthly rent or mortgage; monthly payments on cars, furniture, or any other goods you are buying over time; necessary transportation; utilities (including cable and cell phone expenses), and minimum monthly payments to credit cards. If you have regular monthly medical, pharmaceutical or insurance expenses, those should also be included. Get out your monthly bills for these items; add them up and multiple by three. How fast do you need to build this fund? That depends on when you think your income may be cut off, or greatly reduced. Look to a three to five year horizon. Multiply the number of years by 12 and divide your projected emergency fund amount by that number to see how much you need to set aside each month. Put that money in a separate interest bearing account. Except for the emergencies for which they are intended, don’t touch this money for any other reason. |
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115 Ways You Can Save Money NOW!
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