What Does it Mean to Save Effectively?
A Q&A Session with Phil Mustone, First Vice President, Financial Education Manager at Cambridge Savings Bank
What does it mean to be a “good saver” and welcome back Phil!
First off – being a good saver can mean different things to different people and that’s ok! There are a lot of methods for saving and we will take a run through those today to provide an overview of the different options that you have to save.
What are the different types of savings accounts?
To understand the basics of saving, you’ll want to take a look at where it makes sense to put your money. There are various types of savings accounts at every financial institution and they vary depending on the type of account, how much money you intend to put in the account, and if you prefer to be able to withdraw your money at any time or are ok with agreeing to leave it on deposit for a fixed period of time in return for a higher rate.
You can learn more about the different types of saving accounts that most financial institutions offer here.
How can I save automatically?
This is a GREAT (and common) question! Many people like to have a savings practice that allows them to “set it and forget it” and feel that if they save in that way, their savings are handily “out of sight and out of mind”.
Many financial institutions allow you to set up automatic transfers from your checking account to your savings account. Having recurring transfers of even a small amount into your savings account can really add up over time and once it’s set up, is pretty low effort for you.
CSB currently is offering a special where you can earn a $50 bonus when you set up and make monthly transfers from your checking to your savings account.1 Check it out here – we’d love to reward you for your automatic savings.
What does it mean to save with a purpose?
If your budget leaves you with some extra money, you can begin saving toward your goals. Saving with a purpose has you identify the “why” behind your savings goals, so you can make sure that each dollar you save is toward a specific goal. You can learn more about how to save with purpose here.
Should I be building an emergency fund?
Of course we never think we’ll be in an emergency situation, but it also doesn’t hurt to prepare for one. It is definitely a good idea to consider building an emergency fund so that you will be better prepared for it. Generally speaking, we recommend having enough to cover 3-6 months of living expenses. Saving that much money can seem overwhelming at first, but you can make it manageable by taking it little by little. Even having an emergency fund of $500, $1,000, etc. can provide peace of mind in knowing that the funds are there to get you through a situation. Check out this emergency fund article and accompanying tools that can help you see what may work best for you.
1 Receive a $50 credit to your savings account when you set up recurring automatic transfers of at least $100 monthly from a CSB personal checking account into a CSB Simple Savings account between 1/17/2022 and 4/17/2022. You must complete the following requirements within each of the first six full calendar months following the initial automatic transfer. (1) Receive cumulative monthly direct deposits totaling $1,000 or more. Qualifying direct deposits are electronic deposits of your paycheck, pension or government benefits from your employer or the government. Person-to-person and bank transfers between your CSB accounts or accounts you have at other financial institutions do not qualify. (2) The cumulative transfers must remain in the receiving savings account until the end of the 6th month following the initial automatic transfer. For example, a qualifying automatic transfer set up during the month of January must meet the requirements in the months of February, March, April, May, June, and July to qualify for the offer. This offer cannot be combined with any other offers. Limit one offer per household. The value of the offer will be reported to the IRS as interest. The amount of $50 will be deposited to the receiving savings account in which the automatic transfer is set up within 30 days of completing requirements if qualification conditions are met, and the accounts remain open in good standing. Offer may be withdrawn at any time. All other rules and regulations for checking and savings accounts apply.