Finance & Loans

How to Begin Saving Money for Larger Purchases and Retirement

It is often said that people should try to save at least one fourth of their annual incomes. But during a weak economy and a frail job market, saving money is easier said than done. Still, for most people, including a growing number of Americans who have stopped using credit cards and living beyond their means, saving money has become a way of life; a way to help pay for larger purchases and even prepare for retirement.

But where do you go when you want to invest your money? Where is the safest place to deposit your hard-earned funds? The answer is a bank. Opening a bank account is the first step towards investing your money in a safe place. Most banks are FDIC-insured up to $250,000 or more per account. And while it may seem difficult to save at least one fourth of your annual income, a great way to start saving is to start small.

When most people think of ways to save money, they might consider skipping that cup of coffee in the morning or packing a lunch instead of going out. However, the best way to save money is to actually save it in the bank. Set aside at least 5 percent of each pay check and deposit the money in your savings account. Consider it as another bill, money that you can’t touch. Another option is to deposit your funds in a high interest savings account. While it is difficult to find a high interest savings account these days, it does exist.