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SAVINGS & INVESTMENTS:
YOUR MONEY AT WORK

Saving

The ABCs to Savings is a general refresher guide for learning about important ways to save money. Saving is a habit. The habit works most effectively when the worker is young. However, it is never too late to learn to save money. This guide offers great tips for better managing one’s money. Remember the old adage, “a penny saved is a penny earned.”

What is “Saving”?
According to Webster’s New World Dictionary, “saving” is any act to avoid expense, loss, waste, etc.; to be economical.” Saving for some definite purpose or goal can be a real source of satisfaction. Needless to say, people have various reasons for saving. Saving is not to be confused with
miserliness which results when one hoards money simply for the sake of hoarding money. Saving is different because it is goal-based. A person could easily spend all that she earns as she earns it. However, the thrifty person will save a part of her earnings for future needs.

Why Save?
One’s reasons for saving are as varied as those who save. Some save to be able to purchase a home, car, furniture, to put their children through college, to take a vacation, for retirement, for “a rainy day”, etc. There are many ways and aids to reaching these goals, e.g., savings accounts, stocks and
bonds, credit union accounts, government bonds, insurances, deferred compensation plans, etc.

Rules for Financial Management

Ways to Save Money

The tips for saving money have been compiled from various sources. Some of them easy ways and some are more difficult and more painful than others. However, keep in mind that, “a penny saved is a penny earned.” Any step taken to save money and renders a yield is worth it! The following ways to save are the product of “Free Financial Advice”:

• Consolidate your debt if you have a lot of credit card debt with high interest rates.
  
• Pay the balance in full on all credit cards used during each month.
  
• Create a financial budget to help you save.
  
• Try not to use credit cards.
  
• Adjust your lifestyle to accommodate spending less than you earn.
  
• Consider refinancing your mortgage or debt at a lower interest rate if you can    make this work financially for you.
  
• Do not buy items just because they are on sale.
  
• Do buy needed items on sale.
  
• Eat out as less as possible.
  
• Create a plan to save a specific amount of money each pay day and try raising the amounts saved when you can.
  
• Invest the money you save so that it earns money.
  
• Stop smoking and consumption of alcohol—not only do you save money, but your long-term healthcare costs should also fall dramatically.
  
• Find inexpensive hobbies to fill your time and stop you from spending money that could be saved.
  
• Learn how to manage your finances by reading financial publications and seeking the advice from professionals.
  
• Increase your income (take a second job, obtain a promotion, new job, through investments, etc.)
  
• Contribute the maximum each year to your 401K or to an IRA.
  
• Be patient and don’t give up!
  
• Start saving money today!

Ways for Money to Grow

• Desire your savings to earn higher rates
  
• Have higher balances
  
• Desire the safety of FDIC insurance
  
• Can plan when you need access to your funds
  
• Desire a guaranteed return on your investment

CDs earn fixed rates and your money is FDIC-insured up to the maximum allowed by law. CDs reward you for having higher balances. In fact, the more you invest, the more you can earn because the rate earned is tied to the balance you keep. Some CDs pay a fixed rate of interest which is compounded monthly depending on the terms of the specific institution. The good thing about this
is, you can choose the term that best fits your needs. In some instances, CDs may be eligible to be used as collateral if you are interested in a loan or line of credit. Know this about CDs, however, usually withdrawals prior to maturity are subject to an early withdrawal penalty.

MONEY MARKET SAVINGS (MMS)
Money Market Savings may be looked at as “a premium savings account.” MMS may be the way to go for you if you:

• Usually maintain higher balances
  
• Desire to earn higher rates on your higher balances
  
• Desire the safety of FDIC Insurance
  
• Do not wish to be subjected to penalties if you have need to withdraw your money
  
• Desire to maintain access to your money
  
• Simply need a safe and convenient place to place larger sums of money while searching out longer term investments Federal regulations may limit certain types of withdrawals from Money Market Savings accounts.