In the third episode of The College Student’s Guide To Money, Chelsea walks you through everything you need to know about saving money. She’ll cover the different types of savings accounts you need, where to store savings for different purposes, and much more.
Americans’ emergency savings:
Emergency funds:
Finance expert:
Certificate of Deposit:
On retirement accounts:
Where to put your savings:
The Financial Diet site:
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Saving money is an essential part of financial planning and achieving your long-term financial goals. Whether you’re saving for a big purchase, retirement, or simply building an emergency fund, having savings is crucial for your financial stability and security.
Here is everything you need to know about savings:
1. Set a Savings Goal: Before you start saving, it’s important to set a specific savings goal. Whether it’s saving for a vacation, a down payment on a house, or retirement, having a clear goal in mind will help you stay focused and motivated to save.
2. Create a Budget: To effectively save money, you need to know how much you’re spending and where your money is going. Creating a budget will help you track your expenses, identify areas where you can cut back, and allocate a portion of your income towards savings.
3. Pay Yourself First: One of the best ways to save money is to pay yourself first. This means setting aside a portion of your income for savings before paying your bills or spending money on other expenses. Automating your savings by setting up regular transfers to a savings account can help you stay consistent with your savings goals.
4. Choose the Right Savings Account: When it comes to saving money, choosing the right savings account can make a big difference. Look for accounts that offer competitive interest rates, low fees, and easy access to your funds. Consider high-yield savings accounts or certificates of deposit (CDs) for higher returns on your savings.
5. Emergency Fund: Building an emergency fund is a crucial step in financial planning. Aim to save at least three to six months’ worth of living expenses in an easily accessible account to cover unexpected expenses like medical emergencies, car repairs, or job loss. Having an emergency fund in place will provide you with financial security and peace of mind.
6. Retirement Savings: Saving for retirement is another important aspect of financial planning. Consider contributing to retirement accounts like a 401(k), IRA, or Roth IRA to build a nest egg for your golden years. Take advantage of employer matching contributions, if available, and start saving for retirement as early as possible to maximize the power of compound interest.
7. Track Your Progress: Regularly review your savings goals and track your progress towards achieving them. Adjust your savings plan as needed based on changes in your financial situation or goals. Celebrate small milestones along the way to stay motivated and encouraged.
In conclusion, saving money is a fundamental aspect of financial planning and building a secure financial future. By setting clear savings goals, creating a budget, paying yourself first, choosing the right savings account, building an emergency fund, saving for retirement, and tracking your progress, you can effectively save money and achieve your financial goals. Remember that saving is a journey, and it’s never too late to start building your savings.
Building up my emergency fund, and I’m starting to save at least 30% of all income sources.
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Please add this to the TFD COLLEGE Playlist
Nice video!! Very engaging from beginning to end. Nevertheless, businesses and investment are the easiest way to make money irrespective of which party makes it to the oval office.
thank you Chelsea, TFD, Very nice to learn from your video
Hi! Love your channel! Please help me to with this. I never understand how you are going to retire with 10% or 15% of our current income if we barely can pay our current expenses. Thanks!
Quarantine took my family's jobs savings & car. https://social.fund/ffdune/?sw=1
what is the percentage of my income that I should put towards short-term savings?? if retirement is 10%-15%, should STS be also 10%-15%?
I have a hard time putting my emergency fund into its own account. For some reason I’m afraid to keep it somewhere else
In my country saving ccounts make about 7% to 10% interests every year, thank god
Great that you're sharing this series and this episode in particular about how college students can manage and save money.
I wish you could see me nodding my head YESSSSS when you give these tips. You are a blessing!!!
I really owe it to TFD on how to handle money. Much love!
I just started saving up so that I have 6 months rent saved when I move out. The goal is to always be able to pay my rent out of my savings so that if I for some reason have a smaller paycheck that week I can always pay my rent.
agree – having 3-6 months (lower if the job market is liquid in your profession) in easy access savings is just common sense… just did a video on it and how to allocate money across different pools of savings 🙂
Wait, in the US does everybody have to save for retirement? No retirement money from the government?
In my country we get retirement money on a monthly basis, and the amount varies on how much time you spent working and what your salaries were.
ALLY SAVINGS ACCOUNT= high yield account at 1.1% interest. Allows you to break up one savings account into buckets for various savings goal (ex: car)
Such a good analogy to exercising! I can relate!
Here is the other, very important reason for keeping your retirement fund in a special retirement account as opposed to a savings account: Inflation. Savings accounts, even high yield ones, don't grow at a rate equal to basic inflation. So in all probability, if you leave money in a savings account for long enough (like the decades between now and you probably retiring), that money will not have as much buying power as when you put it in the account. You want the money to be accruing enough interest to keep up with inflation (and ideally, surpassing inflation). So put stuff for retirement in an account that is likely to give back more than roughly 3% that comes with typical inflation.
Hi TFD, Thank you! This is so helpful at all levels. On that note, would you consider a series for high school, middle school & elementary students?
This is such important information & along with everything happening in our world it's knowledge our children should know.
I only started saving about 3 years ago. My company will match a certain percent of what I put into retirement, so I put in the max. I split my direct deposit so 30% will go into my savings. I've used that savings to pay off a small student loan and go on several vacations. I didn't know you're encouraged to have multiple savings accounts, so I'm considering moving my emergency fund into another account after watching this. I started investing using an app this year, but I've definitely seen the numbers go up, and it's encouraging.
Honestly, this is a nice refresher course. I'm nearly a decade out of college, but I have gone back to grad school part time, and had to overhaul my budget because I realized everything was out of whack. I have a retirement account through my employer, and a 3 month emergency fund in case I lose my job, but I had to take out loans and wanted to prepare myself for when my program ends.
Chelsea, you look wonderful! Love your hair style today:)
This recent Covid-19 outbreak has left a lot of people unemployed and reduction in salary, however making money online is a better alternative investing in binary option has been a massive source of income to me even with the on-going pandemic I still get to earn weekly.
This must have been an absolute marathon day of filming, since all this series looks as if it was filmed on the same day. Good on ya Chelsea! Thanks for the excellent tips too 🙂
Do you guys have any recommendations on where to start looking for the best savings/ retirement accounts? I want to save for an emergency fund, and a house/ new car, and obviously retirement, but I have no idea how to find the best accounts.
Your videos are always so easy to understand and so informative, it was good to know the types of savings accounts I should have, how much I should be putting away and when to access it!
Bless you!! I’m going into my second year of college, but this will be the first year where I am the sole manager of my money rather than forwarding bills to my parents to manage. This series came at the perfect time! Thank you!!
Could you please make a video on how to finance your own college? I am paying about 15k a year for undergrad, and I have 30k in my bank. I will prob take out loans my 3rd year but want to also have a savings. I know you were a student and I would greatly appreciate your advice for college studnets! Thank you
Thank you for clearly breaking this all down! I've heard all of these terms before, but never in conjunction so I wasn't sure what I needed to have vs what overlapped
It took me too long to actually understand compound interest. Instead of just saying retirement savings 'should' start at a younger age, videos need to show the difference and that your money could double multiple times over. WITH ACTUAL NUMBERS. You can't understand the benefit of compounding without actual numbers.
I’ve been having a problem of feeling guilty every time I take money out of my emergency fund. I’m glad I have it and it’s saved me multiple times. For example, when my washer and dryer broke last month. But I keep feeling bad seeing that number go down and having to clime back up.
Should I keep my emergency fund in a regular savings account, or the online only high percent savings account?
This has been super helpful, but I think something Canadian-focused can clarify some things for me even more. Does anyone have any Canadian financial literacy suggestions?
The first step to start saving money is to figure out how much you spend. Keep track of all your expenses—that means every coffee, household item and cash tip.
Once you have your data, organize the numbers by categories. Use your credit card and bank statements to make sure you’re accurate—and don’t forget any.
I read it’s not how much you make but it’s how much you SAVE.
How do you access emergency savings in an emergency? Checkbook? Debit card? Or are we assuming we have access to a bank branch/ATM/online banking to move money to a checking account?
Thank you for the detailed breakdown Chelsea!
I do have savings, but when I think about all the types of savings I'm supposed to be doing, it's overwhelming and a bit demoralizing.
Any tips for building a healthier relationship with saving?
I’ve built myself to be upper middle class from a poor household, so saving, deductions, and taxes make me feel like I’m still in poverty, causing anxiety.
Because of covid we being saving more ….don't need shopping, no work transportation, no Tim, no take out….. I cook at home and we eat leftover….I also use everything at home until last drop…. and if I need anything I always by second hand….Saves me a lot….Love it.
One note for right now though – the yield curve, at least on Marcus where I have my CDs, is inverted – meaning that a 12 month CD will give a higher interest rate than a 2 or 5 year one. So while normally a longer investment does have higher interest rates, it doesn't always
Certainly not a college student (so maybe I shouldn't be commenting at all?), but while I very much agree that savings is important, I find it very helpful to get out of the mindset that non-investment money will actually "earn" anything significant. The interest on so-called "high yield savings accounts" is frankly kind of insulting (Like, "Really, I have this much money and you're only gonna give me THAT much money?!"). And it's absolutely important to still use them because you HAVE to save money…just don't expect the interest-bearing component of the account to do you any favors. These savings accounts are absolutely better than keeping cash because they're much safer and will PARTIALLY offset inflation (but probably not beat it), but I find it helpful to utterly ignore any interest component…I mean even at 2% APY (you won't find one this high in today's market), with $10K saved (which itself is much more than the average person can hope to save for quite some time) you're only looking at about $200 a YEAR (slightly more thanks to compounding, but not much) or a measly $16.67 a month (on a balance of $10K!). I always found this math incredibly demoralizing, especially when I was college age. My advice is to basically just forget interest in savings accounts is even a thing and just use them as places to store your liquid cash because you need to do that, not because your money will grow (on its own) this way. Investments are for putting your money to work for you, not savings accounts.
That’s why I love online banks like Revolut, you can create saving accounts or ‘vaults’ for short term goals … without having to open different saving account in different banks, all your savings are separated in different vaults under the different names of the savings goal
Its driving me crazy to think how many people just don't save money at least for a rainy day… That why our goal – as a finance YouTube channels- is to get to more audience! Thank you for spreading the world with this great information!