Consumer Credit: Savings
Accounts Make Financial Sense

February 26, 2006
By TOMMYE WHITE
Special to the Eagle

Our national savings rate is less than zero percent. We're saving nothing.

While the statistic may be discouraging, the fact remains that establishing a savings cushion is imperative to your financial well-being. Fortunately, the experts at Money Management International and America Saves know that you do not have to be rich to accumulate wealth.

Unfortunately, many consumers do not believe this to be true and are easily defeated by their finances and their spending habits.

If you are overwhelmed by the idea of amassing "wealth," start small. Begin saving a minimum of 10 percent of your take-home pay. To make it easier on yourself, you can start today by calling your bank or credit union and arranging for the money to be automatically deducted into a separate account.

As motivation, counselors at Money Management International offer the following four reasons why establishing a savings cushion makes good financial sense.

• Things don't always go according to plan. Unfortunately, bad things sometimes happen to good people. By learning to expect the unexpected, you can keep a minor financial setback from turning into a major financial crisis.

• No one cares more about your finances than you. If you're seeking someone to look out for your financial interest, it is time to take a look in the mirror. Relinquishing control of your financial future is a mistake.

• A little money saved can add up to big savings. Making a down payment on a major purchase can really pay off. Furthermore, having available cash can help you avoid borrowing from expensive credit cards in an emergency.

• The eighth wonder of the world is compound interest. If you put $1,000 in a savings vehicle that earns 8 percent interest, you will double your money in less than 9 years.