Simon Powley from the Kitsap Credit Union shares some intelligent savings strategies. Sponsored by Kitsap Credit Union.
Seattle – From medicinal bills to the supply of repairs, life is full of unexpected editions. An emergency fund can be a real saver, but most Americans don't care about their finances, as they should be responsible.
“You somehow get money and take it out, but life is full of unexpected situations,” said Simon Powley from the Kitsap Credit Union. “If you think about things like tires or roof repairs or just different things that appear, you can find yourself in a fairly difficult situation that could affect creditworthiness but certainly exercise inappropriate stress.”
It is incredibly important to know how much money saves at a certain point in time to prevent them from being in these hard, stressful situations.
“Usually we would recommend three to six months [of living expenses]. What I would say is that you stand in your local loan union and speak to someone who can give you advice on how you can do and plan these things, but I would say that three to six months usually have a good rule of thumb is. “Powley said.
According to Powley, there are some types of accounts that can help to make saving more efficiently.
“I would say a savings account for money market – you want a savings account that can really give you the most return to your money,” said Powley. “Credit cooperatives, we will invest again when our members. Usually we pay a higher interest rate for our savings accounts and lowered the tariffs for loans and such things.”
In a money saving account for money market, the money you put aside remains not only stagnated as in your checking account. Powley recommends doing your research to find a good interest rate that helps you to expand the money you save.
Another method that Powley recommends for saving emergency funds is the equity loan.
“If you receive an equity line, just think of it as a credit card that is attached to your house. You have some funds there,” said Powley. “There are no high fees for you specifically through the loan cooperatives and you can put this money aside you have an emergency.”
The equity loan traditionally has a lower interest rate and is not associated with many fees such as a credit card with high interest rates. It is bound to your home so that it is safe and there are some potential tax incentives for one.
Being disciplined is really the key to get the best out of these accounts. In order to save yourself before this temptation, Powley's last tip is to put her money away and establish a 401K.
“The reason why the program is really successful does not only have tax advantages, but they do not see the funds,” said Powley. “It comes from your salary check and you get it in your account. You don't notice that you are missing and you adapt accordingly so that your budgets can take this into account.”
By setting up an automatic transmission, you can send the dollar amount that your budget enables you to send directly to your savings account without having to see it.
To learn more about money market accounts and other tips on building up your emergency fund, simply visit the Kitsap Credit Union website.
Sponsored by Kitsap Credit Union
Segment producer Rebecca Perry. Take a look at the new day northwest on weekdays King 5 and stream live on king5.com. Contact the new day.