Savings can act as a buffer against unexpected personal financial emergencies. When the economy is booming, people tend to spend more and save less. When the economy is sluggish, personal savings grow. During the coronavirus pandemic, Americans have started to save more.
High-yield savings accounts offer higher interest rates than traditional savings accounts or a checking account, which more than likely yield no interest or otherwise have a much lower interest rate. When paying off consumer debt, building an emergency savings fund, or saving for a major expense, high-yield savings accounts can help you meet your goals.
Having such an account can help finance expenses and debt repayment, such as a car loan, bad credit loans, or a home equity loan. When you look around for your best high-yield savings options, visit Credible to explore possible solutions that can help you earn more money.
Here are a few debt relief tips to help you pay off high-yield debt while saving money with a high-yield savings account to reach your goals faster.
1. Make a strict monthly budget for personal expenses
The national average savings account earns just 0.04% APY, according to the FDIC. High-yield accounts earn much more, sometimes as much as 10 times more. For example, American Express offers high-yield accounts with an APY of 0.40%.
And while personal savings have grown during the pandemic, interest rates have remained low. Ken Tumin, the founder of DepositAccounts.com, said he expects “widespread gains to be unlikely until at least 2024.”
If you want to get ahead, it’s vital to set a strict monthly budget and stick to it. There are several good reasons for a personal budget:
- A monthly budget helps you keep an eye on the price so that you can achieve your long-term goals.
- A budget can help you understand where your money is going each month.
- Personal budgets can keep you from spending money you don’t have.
- A budget can help you prepare for retirement and unexpected emergencies.
- Strict monthly budgets indicate poor spending patterns.
- A monthly budget can also help you pay off debt.
2. Don’t take on new debt
If you’re trying to save and pay off at the same time or pay off a month’s worth of existing debt — such as student loans, credit card bills, or a car loan — the last thing you need is new debt. Of course, if you don’t have an emergency fund to fall back on and something unexpected happens, you may need to consider a personal loan. Right now, interest rates are low, but any new debt has yet to be repaid, which may add little to a high-yield savings account.
3. Reduce spending on non-essentials
If you buy coffee from a local store seven days a week, you may want to make the occasional coffee at home and put the money you save into a high-yield savings account. Supplies like food, gas, and rent are expensive, so save where you can. Credible can explain the process of opening a high-yield savings account through an internet banker. Follow these steps to open a high yield online savings account and save more money now.
4. When you make a purchase, you pay cash
Before credit cards, everyone paid with cash. However, it is much easier to pay with a credit card than to part with the green stuff in your wallet. So if you commit to paying cash for most things, you’ll find yourself spending less and putting what you save in a savings account. Find out how you can earn more money with high-yield savings options through Credible. And when you go out, leave your credit cards at home.
5. Reduce or Stop Subscription Services
A recent survey by Instamotor found that nearly one in ten, or 9.3% of millennials between the ages of 18 and 34, admit to spending $200 or more each month on subscription services. However, many of those services are never used. Instead of spending all your hard-earned money on months of subscriptions, cancel subscriptions you don’t use and put the money in a high-yield account and build an emergency fund.
it comes down to
Debt management can take a while, even if some debt is built up quickly, but following these tips can help. But when it comes to setting aside money for a rainy day, retirement planning, saving for home improvement projects, paying off credit card balances, or paying a mortgage when you first buy a home, don’t leave any money on the table. Maximize your earnings with high-yield savings account options on the credible marketplace.
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