Sarah Toffoli: Hi! I am Sarah with Wells Fargo & Company. Today we're discussing how to choose a savings plan that fits your needs and is the best plan for you. Saving money is a tried and true way to improve your financial situation. We'll start with an important concept. You should pay yourself first. This means, making a decision to put a percentage of your earnings into a savings plan each month. You should do this before you spend any other money. 5% of your earnings is a good place to begin but some start with 10%.
You probably realize that you need to start saving money. But how do you choose the right savings account for you? Well it depends on your income, your budget and your reasons for saving both short-term and long-term.
There are three key types of savings accounts available; a traditional savings account, a money market account and a CD or time account. Each of these types of accounts is right for certain people at certain times.
Many people have more than one savings account. We're going to discuss all 3 types of savings accounts and help you decide which one is right for you. Plus, you also have other investment and retirement savings options that may earn you a higher return but may also require you to take on more risk.
A savings plan is a very important step towards developing financial security and there are many important choices to consider.