With the right accounts you can spend smarter and still enjoy interest on your savings.
In a recent article we explored how to build a holiday budget. Now that you know how much you anticipate spending over the holidays, it’s time to determine which account (or accounts) will help build your savings.
The type of accounts you’ll need—usually a combination of checking and savings—depend on how and when you’ll be spending. Luckily, you can often find both accounts at the same bank or credit union, making it easier to move money as you need.
When should I put my money in a checking account?
Checking accounts are designed to give you easy access to your money and generally have no limits or penalties on the number of transactions you can complete each month. The funds in your checking account are easily accessible via debit card, ATM, check, and more.
When building a holiday nest egg, look at your budget and see how much you anticipate needing to spend in the next few weeks. By keeping that amount in your checking account you’ll be sure you’ve got the funds you need when you need them.
When should I put my money in a savings account?
A savings account serves many purposes. One important aspect when it comes to building your nest egg is the rate of return—AKA the interest you make on the money you save. For example, if you started building your holiday nest egg in September, your savings will have had several months to accrue interest by the time you’re paying for holiday gifts. Even if you haven’t had a chance to save until recently, it’s not too late. Money deposited into your savings now will earn interest.
Another advantage of a savings account is the money is “hidden” on a day-to-day basis. Of course, you always have access to it and you can easily see your funds when you log into online banking. However, when you’re quickly checking your balance for how much you can spend at a time, you’re more likely to look at your checking account, so you’ll only see the amount you’ve set aside for near-term purchases. It’s almost like past you is helping future you out by setting up a separate piggy bank.
When you balance your budget again each week or two, you’ll be able to transfer over the money you need from savings to checking and stay on target with your holiday spending.
Setting up the right accounts with the right financial institution can help ease some of the stress you might encounter during the holiday season. First Entertainment has accounts specifically designed to help creative professionals make the most of your hard-earned money.
Keep following us for more tips on how to prepare for end-of-year spending, and visit us to learn how we can help with all of your financial needs.
