How Do I Become a Better Saver
Here’s the challenge: You only have so much money coming in each month. It all seems to go “somewhere”. You know you should save -- but how do you get started -- and how do you make savings a part of your life?
Let’s face it, with interest rates at near all-time lows, stashing money in a savings account may not seem like the most exciting thing to do! So, let’s start with, “it’s always less expensive to save for a purchase than to borrow for the same purchase – and there’s an extra measure of satisfaction built into paying with cash!
Let’s put this into perspective:
- If you’re buying a car, each additional $1000 that you put into the down payment will save you nearly $150 over the course of the loan.
- Saving and paying cash for a car would be the equivalent of saving nearly 15% of the purchase price of the car. And freeing yourself from a car payment creates a huge improvement in your monthly budget.
First some advice: Start small. Establishing a habit of savings is, at least in the beginning, more important than how much you save. By making savings a habit, it is much easier to ramp-up your savings targets as your circumstances permit.
Reasons you should save.
Create an emergency fund
An emergency fund is intended to cover such expenses as an unexpected car repair, your medical expenses not covered by your insurance plan, or a sudden job loss. If you are just starting out you should put aside at least $1000 for this. If you have been working for awhile, target three to six months of your average income. In addition to an emergency fund, make sure you have adequate insurance in place to help survive other unexpected financial events in your life. If you are married and living on just one income, consider a larger emergency fund.
Save for retirement
Another important reason to save money is for your retirement. The sooner you start saving for retirement the easier it will be to reach your retirement goal. You can put your money to work for you. In addition, you should be contributing to your employer's 401(k) in order to qualify for the employer match. As soon as possible, contribute 10% to 15% of your gross income because contributions are “pre-tax” dollars under the current regulations. Also investigate opening and funding an IRA. Access our helpful retirement calculators
that can help you estimate your Social Security Benefits, how much you will need to save for retirement and how long your retirement savings are likely to last.
Save for a down payment on a home
Buying a new home is often the largest investment that most people make. Obtaining a mortgage is easier and you’ll qualify for better interest rates if you are able to put more money into a down payment. To obtain ‘conventional financing’, a down payment should be at least 20% of the price of a home. This is particularly true for a first-time buyers. If you have a home to sell, the equity from the sale of your present home cou;d be applied it to the down payment on your new home. In that case, your down payment fund should be equal to the difference between your expected equity and 20% of the cost of the new home. Because terms on mortgages are often 15 to 30 years, every additional dollar you can afford to put into a down payment significantly reduces the total cost you will pay for your home. Access our helpful calculators
that will provide you with guidelines on how to save for a down payment. Tips on buying the new home
of your dreams.
Vacations or other luxury items
It’s great to have fun. But it’s more fun if you are responsible and save in advance. Whether your dream is a vacation or a luxury item like a big screen TV, saving for the purchase is far preferable to putting those expenses on a charge card. If you’ve paid for the vacation from your savings, you’ll have fond memories. If you’ve charged the vacation, you’ll have fond memories, a bunch of receipts, and additional monthly bills.
A new or pre-owned vehicle
Who doesn’t need or enjoy owning a new or pre-owned car? Buying a car is often an emotional purchase. Dealers make it very easy to live that dream by encouraging you to sign on the dotted line for easy-to-obtain, extended-term financing. Financing a car with impaired credit, a low (or no) down payment, and extended terms dramatically increases the cost of car ownership. It also almost always results in you being “upside down” (owing more than the car is worth) throughout the life of the loan. Target your car savings fund to cover the expected cost of a new car in full. Paying cash for a new car positions you as a qualified buyer and enables you to negotiate more effectively with the seller. If you cannot save the full purchase price, treat this as a down payment fund. Putting saved cash into a down payment will qualify you for more attractive financing arrangements and significantly reduce the total cost of ownership over the life of the car and the loan. Tips how to buy and how to finance a new or pre-owned vehicle
. Use our down payment estimator
that will help you determine how long it will take you to save for a down payment.
Save to future repair expenses on your home or your car
Consider setting up an emergency repair fund to cover repair costs on your home, car, or other items such as appliances. Saving money into a repair fund will keep you from dipping into your emergency fund – preserving it for true emergencies. You should target this fund to cover anticipated expenses for things like replacing tires on your car, or housing related expenses like a replacing a hot water heater or a installing a new roof.
Save for your education
Invest in yourself! Start early to save for your or your children’s education. Look into using a 529 plan. Using savings to pay for a substantial portion of a college education will dramatically reduce the cost of your education and may help you avoid a large debt hanging over your head after graduation. While student loans may seem like the easiest solution, you may feel differently when it’s time to pay off those loans after you graduate. Create a budget for college to help you manage your money and limit your spending. Use your college savings fund to avoid graduating with thousands of dollars of debt that require repayment shortly after graduation. You also need to choose your college wisely to help save on tuition. Llook for every opportunity to qualify for a grant or scholarship as they do not require repayment.
Statement Money Fund Account
Whatever you're saving for, TPSB has what you need!
High rate statement account requiring a minimum deposit of $2,500. Interest is compounded daily and paid monthly at a rate higher than our regular passbook account. Deposits and withdrawals can be made at any time.
at 937-653-1600 or stop by one of our to open an account today!
If the balance falls below the minimum of $2,500, a $5/month service charge will be assessed and the interest rate reverts to our regular Statement Savings rate. Savings accounts are considered activity accounts and will become dormant after 12 months of NO deposit or withdrawal activity. When an account becomes dormant there will be a fee of $5 assessed each month.
Important Information Regarding Federal Deposit Insurance Coverage (FDIC)
The FDIC Insurance Coverage has been permanently increased to $250,000 per depositor, per institution. To learn more about the FDIC or to understand more about coverage, visit FDIC Electronic Deposit Insurance Estimator (EDIE).
Certificate of Deposit
Savings worth the wait, find out why!
Certificates are available for various terms. Minimum deposit to open is $500. Interest is compounded daily and paid monthly. You may choose the term of the certificate to meet your needs.
Federal regulations require a substantial penalty for early withdrawal on all certificates of deposit. All accounts are insured by FDIC - a US government agency.
The Peoples Savings Bank is a community-based financial institution. We do not normally accept nor retain deposit owned by persons residing outside our normal geographical service area.
Individual Retirement Account
Start saving today for tomorrow!
The Peoples Savings Bank offers several types of IRA accounts.
All IRA contributions can be invested in certificates of deposit with varying maturity dates. IRA's at Peoples feature premium rates and some allow additional deposits during the term of the account.
Choose which IRA is best for you: Traditional vs. Roth
The Traditional IRA
allows individuals under the age of 70½ with earned income to contribute yearly to an IRA account *. Deductions on IRA accounts are based on a customer's adjusted gross income, tax filing status and whether the customer is a participant in an employer maintained benefit plan. IRA owners who have reached the age of 50 may contribute an additional amount to 'catch up' their retirement savings.
The ROTH IRA
is a non-deductible IRA that features tax-free withdrawals for certain distributions after a 5-year holding period. There are two requirements to be eligible to contribute to a ROTH IRA. You must have earned income and your adjusted gross income must be within the allowed limits.
The Peoples Savings Bank is a community-based financial institution. We do not normally accept nor retain deposits owned by persons residing outside our normal geographical service area.
Health Savings Account
Let TPSB keep your family healthy. Find the benefits of a tax-advantaged HSA today!
Are you looking for help with the high cost of healthcare? A health savings account might be right for you!
A Health Savings Account (HSA) is a tax-advantaged medical savings account available to taxpayers who are enrolled in a High Deductible Health Plan (HDHP). If you are covered by a HDHP plan, you can establish a tax exempt Health Savings Account (HSA) to help pay for qualified medical expenses for you and your family.
The funds contributed to an HSA are not subject to income tax, but can only be used to pay for qualified medical expenses for yourself, your spouse and your dependents. The excess funds are allowed to roll over from year to year and remain yours.
To qualify for a Health Savings Account you must:
Watch one of our Online Education Center videos about Health Savings Account
- Be insured under a High Deductible Health Plan
- Not be insured by any other health plan
- Not be enrolled in Medicare
- Not be claimed as a dependent on another person’s tax return
Watch one of our Online Education Center videos about Debit Cards
- Free Debit Card
- Tax savings
- Earned interest
- Allows deposits by employee or employer
- Allows direct deposits
- Minimum deposit to open is $1.
- No limit on transactions