Saving money: 5 tips for savvier saving

Every month, you budget for necessities like housing, electricity, and food. Then with any leftover funds, you may spring for cable or a nice dinner out, and hopefully add to your savings. As you stretch your dollars, don’t forget to maximize your monthly income and make your money work for you! We’re talking about dividends: When you’re saving money and then earning dividends on it, your savings will grow faster.

“Some people refer to it as ‘getting paid’ to save,” says Karen Guy, Business and Marketing Analyst for SAC Federal Credit Union.

Dividends are essentially your financial institution paying you to hold your money. Plus, the more you save, the more you earn in dividends – meaning you’ll get to your savings goal even quicker.

Sounds like a good deal, right? Here are five tips to help be a savvier saver.

1. Research savings dividend rates. Financial institutions base their savings dividend rates on the rate established by the Federal Reserve, but that doesn’t mean all credit unions and banks offer the same rates.

“Because the Federal Reserve wants to make it cheap for people to borrow money, dividend rates are low right now,” Guy says. “But there are still some financial products out there that offer savings benefits.” Some financial institutions, like SAC, even offer dividends on checking accounts.


Dividends on a checking account? Yes, it’s true.

If you want the benefits of dividends in a checking account, take a look at SAC’s Saver’s Advantage Checking Account.

The account pays 5.01% APY on balances up to $1,000. (Some requirements apply.) SAC is able to offer this rate, which far exceeds the current rates most banks pay on their accounts, because it’s a credit union working to benefit its members.

2. Have a goal and share it. Having a goal in mind is a good start because it helps you focus on the reason for saving in the first place. Whether your goal is a down payment on a house, a vacation, or building an emergency fund, share it with one or two close friends or family members and then update them on your progress. Research shows doing so will help you stay on track.

3. Have a plan. Not sure how to reach your goal? Check out SAC Federal Credit Union’s free personal financial management tool to create a custom plan.

4. Every little bit counts. Even if you’re just depositing a few dollars here and there, stay the course.

“I think children provide us the best example for saving,” says Guy. “They’re so excited to make a deposit, even if it’s just $1. While it doesn’t seem like much on its own, over time those small deposits will add up to a bigger balance.”

5. Keep at it. Finding ways to save depends on your individual financial situation. It might just be about finding a few dollars here and there. Can you walk instead of drive? How about arranging a babysitter swap rather than hiring someone? (You watch your neighbor’s child on Friday evening and they watch yours on Saturday.) Go soda-free for a month and add the savings to your account. Or you can decide to allocate a portion of any salary increase or cash gifts you receive to savings.

Think creatively, and you can find ways to keep saving money. And when you add these savings to a dividend-bearing account, your money will continue to work for you after you’ve deposited it.

Now it’s your turn! What tips do you have for saving?

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Author SAC FCU Managing Editor

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