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Spending Your Savings on Purpose

Posted December 2, 2020  |   Topics: Savings Tips, Wallet Wisdom

Three Ways to Make the Most Out of Your Savings.

You’ve made a budget. You’ve stuck to your budget. And you’ve finally managed to have money left over at the end of every month. Congratulations! Now comes the tricky part: what to do with that extra cash?

1. Give your savings a job.

Instead of saving for saving’s sake, give every dollar a job. A few important jobs could include:

  • Paying off debt
  • Building an emergency fund
  • Saving for future goals like a home, wedding, car, or vacation
  • Saving for retirement
  • Investing in stocks, bonds, mutual funds, or real estate

This approach will help you become more intentional with your money and improve your financial stability over time. Even when you spend money on the fun purchases, you won’t feel guilty because you assigned a fun job to those dollars.

2. Create sub-savings accounts.

A savings account is a nice start, but dumping all of your money into one account can be difficult to manage. Sub-savings accounts allow you to allocate money to different savings categories so you can keep track of your goals. Whether you’re saving for a home, wedding, car, renovation project, or emergency fund, you can categorize the different amounts and easily track your progress. The best part is your sub-savings accounts can still earn up to 0.25% APY* at LMCU.

3. Balance your short-term and long-term goals.

It’s easy to focus on more immediate needs like your next vacation, but don’t lose site of the bigger picture. Save for long-term goals like your kids’ college fund, or bigger purchases that require years’ worth of planning, like a new roof. Your future self will thank you.

Additional resources

For more ways to stay financially healthy, wealthy, and wise, check out our Wallet Wisdom podcast. Each episode features a new topic with expert advice from financial professionals.

Also, listen for 'Stump the Show Trivia' where we test our financial nerds in pop culture trivia. The stakes? Winnings go back to the communities and charities you care about. Find us on Spotify, Apple Podcasts, and Google Play.

*APY = Annual Percentage Yield. Rates as of 09/16/20. Fees may reduce earnings. Rates are subject to change. $5 minimum to open, $100 minimum to earn dividend.

Topics: Savings Tips, Wallet Wisdom