You have heard me talk about this time and time again if you follow me on Instagram (@lifewithadele).
The G.O.A.T. (Greatest of All Time) Savings Account option in my opinion goes to High Yield Savings Accounts (HYSA).
Per Google “A high-yield savings account (HYSA) is a type of savings account that offers a higher interest rate than traditional savings accounts, often 10 to 20 times higher than the national average. While they offer higher returns, they generally don’t come with greater risk, as balances are federally insured, typically up to $250,000”.
This is the one thing that just works for me. I put my money in and leave it to do the job. With the higher monthly percentage I get back, my coins are working harder for me than they would just sitting in my regular bank or credit union. Now don’t get me wrong, banks and credit unions have their place (I still use both) but if you can stash away a little at a time to that HYSA, you’ll set yourself up for greatness. You’ll look back in 6 months and see the fruits of that little labor.
Simply setting aside $50 a month can really do wonders for your savings with a HYSA. For me, I increase that good money juice with a windfall that I am blessed with. Any overtime or bonuses, tax returns, etc., automatically goes to saving if debt is paid IN FULL! No questions asked, no excuses, and no exceptions. Those shoes, that cool gadget, and that brand new car aren’t worth it (trust me, I am speaking from experience). I would feel more secure if I had more cash instead of that brand new car sitting in the garage.
Now, you may be saying Adele, that’s all well and good but how do you make your money work for you easily? AUTO TRANSFER! You have to pay yourself first (after Tithes of course). If you pay yourself 10%, then have that on auto transfer to an online bank account that you don’t have direct access to, this will prevent these funds getting lost in the budget. Auto Transfer those IRA and Roth IRA contributions as well. Anything that is a set amount every paycheck should be on auto transfer; this allows your funds to stay in their designated categories and not be drafted into other areas like Entertainment or Eating Out.
It’s a great way to make your money work for you over time. I have a HYSA that allows Buckets, so I can categorize my savings within the account itself. I think that is a great way to save for multiple things at once.
I personally use Ally Bank (not sponsored, I just really enjoy them). They are an online bank, so they have no physical branches. If you want your money, you’ll have to wait a couple of days for it to transfer to another bank (which gives me time to contemplate if I REALLY need those new shoes or that organization system I saw on Amazon). A friend of mine uses Capital One and another uses Credit Karma. All great choices and have a good return margin. I love that Allly Bank is online because if I personally cannot see it, then it flourishes. I cannot go in and sabotage all my hard work with saving by swiping a card. As far as I know, that money does not exist until I log in to check the progress.
If you have hit your savings goals and are out of debt, then use that extra windfall of income for investing in your financial freedom. That $1,000 – $3,000 can quickly create double digits while in the stock market if you invest it right.
Another note when saving. Take the time to do the math! How much do you have to work to save the same amount of money you are thinking about spending This makes it more tangible for some people. If you must work 6 hours to pay yourself back for that single purchase, is it worth it? Now this is a great concept when it comes to eating out or buying a new pair of Jordans as that stuff can get pricey quick! Do you really want to work an extra 15 hours to make that car payment? Think about it: yes, that may seem drastic, but it is true in so many people’s lives.
I’ve said it before and I’ll say it again… GET a HYSA.
Remember: While this is a fantastic way to grow your savings … this is a short term wealth builder strategy. If you’ve got some extra funds to hold on to for a few months this works. But if you’re looking at a few years you may do better investing in the stock market as they have even higher returns.
-Adele-
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