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Savings: Your Key to Success

Sep 14, 2018 ​
Savings: Your Key to Success

Putting money aside to achieve your goals is probably the single most important thing you can do to give yourself a brighter financial future. The hard part can come when you try to create your initial savings plan. How much should you be saving? In what kind of accounts should you place your hard-earned money? How do you measure progress? Here’s some ideas and tips to help you set goals, analyze your cash flow, and create and maintain a successful system for reaching your objectives.

  1. Set goals: The first step in achieving your financial goals is determining what your goals are. For right now, just think about the goals themselves and when you want to achieve them – don’t worry about the cost. Do you want to buy a new computer in a year? Have a down payment for a house in four years? Check out Nusenda Credit Union’s savings account options to discover which will work best for you.

  2. Calculate: Once you figure out what your goals are, you can then calculate how much you should set aside each month. How you do this depends on how much time you have to reach the goal. Nusenda Credit Union has a great set of calculators to help you make sound decisions in everything from saving to investing to retirement.

  3. Pay yourself first set up automatic deposits: Don’t just set up a bill pay system for your monthly expenses — set up an auto save, too. By automating, it will be easier to establish savings and emergency funds. Have a portion of your paycheck directly deposited into your savings account, or set up an automatic, monthly or biweekly transfer from your checking account to your savings account to make the process painless, and if you don’t see it, you usually won’t miss it. Nusenda Credit Union offers a number of mobile and internet banking features to access and set up scheduled deposits, safely and securely.

  4. Short-term goals can be reached in under a year. To know how much you’ll need to save, look at what the cost of your goal is now – it is unlikely that the price will be that much different seven or eight months down the road. Once you know the total amount you need, determining the amount you need to save each month is easy – just divide the cost by the months until your goal date.

  5. Mid-term goals take one to five years to achieve. To determine the total cost and amount you need to save per month, use simple division, like you would for a short-term goal. This especially works for lower-cost and shorter term goals. For goals closer to the five-year mark, you may want to take into account inflation and investment return the way you would with long-term goals. The math for the first method is much easier, but the second gives you more accurate numbers.

  6. Long-term goals are achieved in more than five years. These can be trickier to plan for because you may need to consider inflation and your projected return on investment. Once you determine what those will be, use a financial calculator to decide how much you’ll need to set aside weekly, bi-weekly, or monthly.

  7. Be flexible: Your savings should be the first “bill” you pay each month. But what if you simply can’t put the $150 into your vacation fund one month because your transmission blew up? Resist the urge to panic, and consider it a temporary setback. With a little extra effort, you may be able to make it up over the next couple of months. You may also want to revisit your goals and budget and make adjustments so that they are more achievable.

  8. Use a savings tool: Make sound financial decisions with professional advisement, useful at any point in your life, whether you’re working to save for school, for a house, for retirement, or for your family’s future. Nusenda’s no-cost, no-obligation SavvyMoney and BALANCESM Financial Fitness education, counseling services, and online webinars are available at times that work for your schedule – even evenings and weekends. Plus, our Money Manager online financial management tool can help track your spending, set savings goals, and pay debt down faster.

  9. Reward yourself along the way: Maintaining your money motivation can be difficult, especially over a long period of time. That’s why it’s important to treat yourself along your savings journey. When you hit a benchmark, do a little something nice for yourself.

  10. Maintain an emergency fund: Before you commit your newfound savings to volatile and hard-to-reach investments, make sure you have at least three to six months’ worth of expenses saved in an emergency fund to see yourself through difficult times. Keeping it liquid, meaning easily accessible, will guarantee that you can always get to your money quickly.

Once your short-term, mid-term, and long-term goals are set, and your emergency fund is in place, it’s time to consider what type of account will be the best place to keep your money effectively working for you. Keeping savings in your checking account is usually not a good idea because you may be tempted to spend it prematurely. So where can you put it? Here are some recommendations:

  • Savings Account: You deposit your cash and make withdrawals at any time. Savings accounts are insured by the NCUA (for credit unions) or FDIC (for banks). In exchange for total liquidity and stability, savings accounts usually provide a very low investment return.

  • Money Market Savings Account: These are similar to savings accounts – your money is insured and easily accessible, but interest rates (or dividends) are typically higher. However, that rate is usually variable, not fixed, and you may have to deposit a larger amount of money to qualify.

  • Share Certificates: Also known as CDs, certificates are insured and typically offer a higher interest rate (or dividend) than savings accounts or money market deposit accounts. The catch – if you withdraw your principal deposit from the certificate before it matures, you usually have to pay an early withdrawal penalty. Usually, certificates are available in terms from 90 days to 5 years for maximum flexibility.

  • IRA Savings Accounts: Set aside money for your golden years. With a Traditional IRA, you receive tax-deferred earnings until they are withdrawn, plus potential tax deductions. Roth IRA contribution amounts are not tax-deductible, but your earnings are tax-free.

  • Coverdell Education Savings Accounts: These types of accounts are meant to be a tool for saving money for qualified education expenses. It is tax- and penalty-free, and you can contribute up to $2,000 a year, for each dependent under 18 years.

  • Holiday/Vacation Club Savings Accounts: Start saving for the special occasions in your life – this type of account, usually set up with automatic transfers, is a simple, great way to help save money. Accounts mature usually at the beginning of the summer or at the start of the holiday season.

Nusenda Credit Union members enjoy the benefits of varied savings options to accommodate a broad range of short- and long-term financial goals. When you save with us, you can also earn cash back through a Earn Your Return dividend – and give back to the places you call home through our one-of-a-kind, award-winning Community Rewards® program.

Make the switch to an evolved banking experience – be a part of The Power of WE® by becoming a Nusenda Credit Union member-owner today.

Big bank services, small town attitude.

Nusenda Credit Union. The Power of WE®.



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