Mar 21, 2019 / Money Tips
Being smart with your savings is the first rule of finance. But saving money is much easier said than done. With so many demands on your dollars, even before your paycheck comes in, savings can sometimes feel like an afterthought. Unfortunately, this is a backwards way of building wealth. And even though putting a little money away every month is hard, it is manageable if you follow a few simple savings rules. Here are 3 ways a money market account can help you save smarter.
When you commingle your savings with the rest of your money, it’s way too easy to come up with excuses to call them one and the same. And before long, your savings gets spent on groceries, mortgage, and utility expenses. It’s just the nature of the beast. On the other hand, when your savings is separate and apart from the rest of your money, it becomes much more difficult to dip into. With a money market account, your money is completely separate from your checking account. Plus, withdrawals are limited to just a few per month, which strikes the perfect balance between accessibility and promoting better savings habits.
Saving smart means allowing your money to work for you. And your money does its best work when you put it in an account with a higher interest rate. Interest rates on money market accounts fall somewhere in between a traditional savings account and a term deposit. It hits the sweet spot, giving you both flexibility with your money and better interest. Best of all, your money market deposits are federally insured so you can have all the benefits of earning higher interest without the risk of losing any of your hard-earned money to an unpredictable market.
Now that you’ve found a smart place to keep your savings, your money market account is the perfect way to save for life’s semi-expensive, semi-infrequent expenses. Taxes, tuition, emergency medical, car repair, or home repairs are all good reasons to withdraw your money market account funds. These types of purchases are (hopefully) far enough apart so that you can take advantage of the extra interest. And if they’re more frequent, money market accounts are immediately accessible. By dedicating a specific amount every month to your money market account while only withdrawing for very specific reasons, you can get a high rate of return and let your money continue to grow.
A money market account is a smart way to save. If you’re having trouble saving or you’re interested in finding a better way to save, talk with a Utah First financial expert to start saving smarter today.