What is Saving
Saving is when you take money you already have and keep it for future reasons. Usually you add more over time to increase the amount. Saving is smart so that you always have a backup plan. Below are some reasons why you should save.
Reasons For Saving
Emergencies: You should always try to have money saved up in case of an emergency. If your house were to catch on fire or your basement were to flood this money would definitely come in handy!
Recurring Expenses: This type of saving would go towards things like monthly bills or birthday gifts. This is an easy saving because you know how much to save.
Future Purchases: This money would go to things like vacations or new shoes. This is for WANTS and not NEEDS.
Financial Goals: You should always have goals set especially for money. Goals need to be measurable and attainable. Maybe this means saving $100,000 a year to save for a child's college education. Spending and saving should be planned.
Retirement: This is EXTREMELY important! You obviously need to save for retirement and the earlier you start the better. You're going to need a lot and you're going to save a lot. Always keep retirement in mind.
Motivation
Sometimes saving is hard. Spending is a lot more fun! You need to set financial goals like above and sometimes you need motivation. If your goal is to go to Hawaii before your 45 then maybe put a picture of Hawaii up in your room or bathroom. If your goal is to go to Purdue then put a Purdue magnet in your locker to remind you to get good grades. Goals are smart but they can be hard!
Compound Interest
Other Acronyms
http://www.wikihow.com/Calculate-an-APY-of-a-Bond
APYAnnual percentage yield (APY) is a normalized representation of an interest rate, based on a compounding period of one year. APY figures allow for a reasonable, single-point comparison of different offerings with varying compounding schedules.
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https://wallethub.com/edu/annual-percentage-rate/25564/
APRThe term annual percentage rate of charge (APR), corresponding sometimes to a nominal APR and sometimes to an effective APR (or EAPR), describes the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, etc.(This is bad)
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