How to Build Up a Personal Savings Account and How to Use it

The following article is a guest post.

I was only 14 when I opened up my very first savings account. It was a special type of custodial account: I was allowed to make deposits but no withdrawals (except if it was to close the account completely).

I saved and saved all summer long with one specific goal in mind — to have enough money to buy brand new clothes for my very first year in high school. With determination and discipline I reached my goal at the young age of 14 and repeated the process many times after that.

You can do the same no matter your age or motivation. All you need to successfully build up a personal savings account is a) a S.M.A.R.T. personal goal and b) a plan tailored to your unique situation.

What Is Your Goal?

My goal was very simple and reflective of my youthful mindset at that time. What is your station and life and what is your savings goal? Do you want to save enough money to buy a new car? Reduce your debt? Give someone you love a very special gift

Write your goal down on a sheet of paper or a spreadsheet and then ask yourself if it is S.M.A.R.T. — specific, measurable, attainable, relevant and timed. It is important to have a realistic, clearly outlined savings goal in mind that you can actually achieve considering your resources. For instance, setting a goal to save $1 million within the next few months to buy a yacht when you make $40,000 a year is not S.M.A.R.T. Saving $4,000 over the next 12 months to purchase a used Honda Accord is a much more balanced and achievable goal.

Create a Plan

Next you need an action plan to reach the savings goal you set. At 14 I started off by estimating the amount of money I would take home each week based on my hourly rate and hours worked per week (I was very meticulous at that age). Then I subtracted that amount from my meager expenses at the time to decide how much I could put aside each check.

So take a moment to run through your budget and figure out how much you can afford to save. Divide the total savings goal by the amount you’ll put aside each month to determine how many months it will take to reach that balance. Write down what you will save each month or pay day next to the goal you defined.

Choose a Savings Vehicle

Now that you have a goal and a plan, you need a place to store your money. You have a number of choices — you can open a traditional savings account at a local bank, a money market account (for very large balances), a direct online savings account or a certificate of deposit account. Choose the account type that offers you the best interest yield (interest the bank pays you) and the most convenience for your needs.

Direct online savings accounts often have better rates than traditional brick and mortar banks. Generally, certificate of deposit accounts (which you can open either online or at a local bank) have the highest yields. If you prefer to save at a traditional bank, open an account at a credit union for the best yields.

Use Personal Savings for Deposits Only

If you’re seriously committed to building up your savings the best rule of thumb is to make it as difficult as possible to access your cash, so apply for a “passbook” style savings account. With a passbook account you do not have a debit card, ATM card or any other method of making quick withdrawals. You must go to the bank to perform all transactions — the teller will record each transaction in a passbook or on a printed statement.

An online savings account is also helpful because you must put in your transaction requests using a computer and you also have to wait two or more days for a withdrawal to process. That gives you some time to think over your decision.

Article provided by Jon Robinson- Consumer  Financial Advocate for America’s Debt Help Organization, serving the public with authoritative information on a broad range of topics related to financial well-being.

Health is Wealth Series: Toothaches are nothing to play with

This week has really been rough for me and it’s not because it’s the first week after my highly anticipated lay-off.  The reason this week has been so rough for me is because I’ve experience the worst feeling of my life…..a toothache.  I don’t know which feeling is worse, a toothache or being shot in the leg.

By the way, I’ve never been shot in the leg….but I might have preferred that over a toothache. 🙂

It was so bad that I was basically bedridden for about two days.  It started aching late Monday night and it grew worse the following day.  I went to the dentist early Tuesday morning but they couldn’t really do anything for me except give me three prescriptions to take because by that time my left jaw was really swollen.  One of the prescriptions was for pain, and the other two were for the infection.

Anyway, to make a long story short, the swelling in my jaw has gone down completely as of today (Friday) but unfortunately I’m going to have to have a root canal.

That sucks.  I hate the dentist.

Have you ever had a root canal?  The pain is terrible but the cost is even worst.  I was told that I would have to pay $883 out of pocket and that’s with insurance…..ouch.  I’d hate to see what that cost would be without it.

I honestly think that amount is a little on the high side, so I’m going to shop around and see if I can get a better deal.  Yes that’s right; you can shop around for a better deal on just about everything from buying a car to having a medical procedure done.  As a matter of fact, I highly recommend it.

So what’s the take away?

The take away is first; take care of your mouth….get regular check-ups.  Don’t let it get out of hand like I did, or it will cost you a lot of unnecessary pain and money.  The entire idea is to avoid paying more money than you have to….but some of us have to learn the hard way. 🙁   Second of all, check out at least three other dentist and compare cost.  Make sure that they are in network with your insurance provider as well as find out the maximum amount your insurance is willing to pay for the procedure you’re having done.  This will give you a good guide to adhere to when selecting a good dentist.  Personal references are also a great way to find a good reparable dentist.

Take a lesson from me, take care of yourself.  You’ve only got one mouth…

When’s the last time you visited the dentist?

A lesson on Tipping (Gratuity)

I don’t know about you but I love trying out the newest restaurants around town and not too long ago, I went to a popular establishment called “Cheddars” located in South Georgia.  This place is really happening and bustling, however, what I like most about it is the great and fast service and the reasonable prices.  In fact the prices are outstanding.  James (my boyfriend) had salmon on a bed of rice, with steamed broccoli/green beans and I had a nice big Turkey Club with fries.  Not to mention to glasses of ice tea/lemonade with sweet rolls for starters and a bowl of ice cream for dessert.  You’d never guess the price.

Drum roll please……

It only came to $23.80!  That’s a great deal.  If we’d eaten anywhere else, I’m sure the tab would’ve been well over $30 bucks.  So kudos to Cheddars!  They’re officially now one of my favorite restaurants. 🙂

Our waiter was nice and very attentive.  She made sure that we had refills and anything else we needed.  I had no complaints about her service.  She did everything right. So when it came time to pay the tab and tip, I took care of her.  I left her a nice $4.00 dollar tip….that’s more than the required 15%.  However, James thought that I should’ve given her more.  What do you think?

Should your gratuity be based on the amount of the ticket or be commensurate with the service?  I think it depends on the type of service.

First of all, tipping for service is just plain old good etiquette.  I, personally, tip for everything from getting my hair and nails done to valet parking.  I believe that it is the right thing to do….especially if they provide superior service.  I normally tip a buck or two for valet and other similar services and this is not based on the amount of the tab; however I do go by the price of the tab when I eat at restaurants.

What I’m fuzzy about is the minimum required gratuity.  Is it 15% or 18% these days?  According to my research it ranges from 15-20%, so as long as you’re in that range, you should be fine.  A good way to gage what percentage is acceptable is to give 15% for basic service and 18+% for superior/first class service, but it’s to your discretion.

Now I know that some people don’t deserve a tip when they give bad service right?  I’ve experienced this at least once and I still left them a tip.  It wasn’t 18-20% but I did leave them a tip nonetheless.  I chalked it up to the person was having a bad day.  Everybody is entitled to one of those every now and again. 🙂

Bottom line, I think the proper way to view giving a gratuity is to always give the basic 15%, no matter what…even if the service is horrible.  At that point you should definitely report that individual to management or just don’t go back to that establishment.  If the service is great, then reward them by giving a nice tip of 18+% or more.  They’ll remember you when you come back and go out of their way to provide excellent service for you time and time again.  In some cases, the better the tip, the better the service.  This is just food for thought.