Do you want to improve your Financial Health in 2021? There are myriad places you could start. But where should you start?
Many financial planners state the #1 priority is establishing an emergency savings fund. So that is what I’m going to help you do. This year you are going to build healthy financial habits and you are going to begin by setting up an emergency savings fund in a high yield savings account. There are many websites you may reference to help you choose an online savings account. Just enter “how to choose an online savings account” into your favorite search engine. I chose Bankrate.com for my example. Let’s get started on how to build the habit of saving!
Step 1: Getting Started
Go to the site Bankrate site to begin. You may also type “bankrate.com” into your browser’s address bar. Once you are on the home page, select the “banking,” and then “savings account rates” links. You’ll see the title “Best online savings accounts for February 2021” at the top of the page.
Step 2: Find the Best Savings Account
Scroll to the bottom of the same Bankrate page you are currently on until you see “How to find the best savings account. Take a few minutes to look over the information provided. This is an awesome free education. You will learn everything you need to select the best account for your Emergency Savings Fund.
Step 3: Choose Your Criteria
Now scroll back to the top of the page. You will see two options, “Featured” and “All Products.” To the left you will see a table to enter your initial Deposit Amount, Account Type (choose “Savings Rates” from the drop-down menu), ZIP Code and Sort By (choose “APY” from the drop-down menu. This will limit your available choices to the banks that meet your chosen criteria.
Step 4: Choose the Best Bank Account For You
Choose the “All Products” option to show all banks sorted by the criteria you entered on Step 3. By default, Bankrate will list the banks that have paid for advertising at the top. Selecting “All Products” ensures all banks that meet your criteria are included. You are now ready to build your first healthy financial habit by choosing a bank for your emergency savings account. Once you have completed your search and selected the best bank and account for you, move on to step 5.
Step 5: Open the Account
Open an account and link your current checking account to this online bank. Have your checkbook or account information available as you will need your current bank’s routing number and your checking account number.
Step 6: Choose a Contribution Amount
In this step, you choose your contribution amount. Pick an amount you can budget to save each month. It doesn’t have to be a large amount to start. Even $5 is okay.
Step 7: Automate the Savings
Set up a Recurring Automatic Withdrawal. Go back to your new online Emergency Savings Account and set up a withdrawal to occur automatically each month from your linked checking account.
You are now on-track to building a healthy financial habit of saving. As you continue to work-out your savings “muscle,” challenge yourself every few months to increase the amount you are saving. Just as an athlete works to improve physical fitness, a good saver strives to improve their financial fitness. Once you have firmly established this habit, you may want to explore some other healthy financial habits and continue to increase your personal financial fitness level.
If you need a Financial Coach to help you establish the habit of saving and other healthy financial habits, consider our Financial Coaching Program.
Disclaimer: This information is intended to be educational and is not tailored to the needs of any specific user. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions and consult a Financial Advisor, if necessary.