Ways You’re Not Getting the Most From Your Nest Egg

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The “nest egg” is the goal of pretty much every adult. The idea of having a pool of money ready to pay for emergencies, major purchases (like down payments on homes), etc. Unfortunately while everybody wants one, not everybody is able to build one. Here are some of the things that you can do to make it easier for you to build a solid nest egg for your future.

1. While the type of savings account you set up is entirely up to you, you can definitely help yourself out by searching out the savings account with the best interest rates. Some of the best interest rates available these days are offered through internet savings accounts. The great thing about internet based accounts is that, because they are cheaper to run, they offer their account holders more in the way of compound interest rates, perks, etc.

2. Don’t keep your money in just one account. When you’re able, roll your money over into higher interest accounts. It’s also worth looking into CDs and other high interest products your bank has to offer you. The best thing about these types of accounts, particularly CDs, is that you can set them up to be inaccessible for a few years…or even longer if you really want to make sure your money earns as much interest as possible.

3. Don’t stash your burgeoning nest egg in your house. You might not trust the banks very much, but you will serve yourself far better if you save up your money by using a bank account instead of a pickle jar that you keep under your bed. For one thing, the cash you keep under your bed isn’t going to accrue any interest. For another, with inflation rates rising as quickly as they are, the dollars you save now will probably only be worth quarters later on when you need them.

4. Don’t link your savings and checking accounts. This makes it far too easy to dip into the account “once in a while” to get the bigger things that you really want but don’t necessarily need. This dipping is the main reason that people aren’t able to turn their meager savings into major savings. To get the most out of your money, set up an automatic transfer from your checking account to your savings account each month and leave it at that.

5. Deposit at least a little bit of money into the account every week or month. You might not be able to afford much but even small amounts help. If you save just $20 a week, that adds up to $80 a month, $960 a year and, after thirty years, $28,800 and that’s before you add in the interest your money will have earned if you let it sit there and don’t use it for anything.

These are just five things you can do to increase the likelihood that you will actually be able to build up that nest egg that you know is so important. They might seem like a pain now, but you’ll be glad you used them later on.

Material consideration was given for the writing and editing of this post.