Video: Home Budgeting--Saving for a Rainy Day
Video Transcript: Home Budgeting - Saving for a Rainy Day
Hi. I’m Elsa M. from Quicken with words of advice for anyone who’s on a tight budget.
A budget squeeze offers an easy excuse not to save. But when you’re just making ends meet, you need a financial buffer even more than people who have cash left over after they pay their bills.
That’s why you should save in advance for unexpected expenses.
It’s okay to start small. For instance, start with $500 and add just $20 a week. If you earn just 3.5% interest, in three years you’ll have $3,649 on hand to fix a leaky roof or install a new furnace.
So where do you find $20 a week? Bundle telephone, cable and Internet services. Host potluck dinners instead of going out to eat. Try a “stay-cation” to avoid airfares and hotel bills. Then bank the money you save in a savings account at your local bank. Certificates of deposit (CDs) pay higher rates of interest, but you may not have access to your funds for 90 days or longer. Money market funds are accessible and generally pay higher interest than a savings account but require high minimum deposits and charge fees.
Don’t wait for rain. Start saving today. Quicken can help you track your spending and set savings goals you’ll actually reach.