4 ways to save for the next 5 years
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The ring bearer presents the rings to the Pastor at a wedding in Waycross, Georgia, July 2, 2017. The marriage between two military members was witnessed by friends and family. (U.S. Air Force photo by Airman 1st Class Kristen Heller)
SUMMARY
Boost your savings and build a solid financial future with these tips.
What are the next five years going to bring you? Are you planning for a wedding, expanding your family or buying a house when you PCS? Planning for major life events in the next three to five years requires careful financial preparation. With the savings rates the way they are, you need to be smart about where you are putting your money so it can work at making a greater return.
Here are 4 ways you can save for the next 5 years:
- Automate everything
You can’t forget to save if it automatically comes out of your paycheck without you seeing it. Automating your savings by having a portion of your paycheck directly deposited into your savings account or certificate eliminates the temptation to spend that money elsewhere. This method promotes discipline in saving and helps you steadily progress toward your financial goals without the need for manual transfers. - Consider an MMSA
If you need to keep your money relatively liquid (meaning you can access it quickly) but still want a good return, Money Market Savings Accounts offer a balance between a regular savings account and a certificate. They typically provide higher savings rates than standard savings accounts while allowing more flexibility in accessing funds. This makes MMSAs suitable for goals requiring occasional withdrawals, such as emergencies or short-term needs. Navy Federal Credit Union offers a competitive rate with their Money Market Savings Accounts. - Set up a certificate for targeted savings
Certificates are a powerful tool for saving toward specific goals. Unlike a regular savings account, a certificate offers an oftentimes higher fixed savings rate for a predetermined period, ranging from a few months to several years. This stability ensures that your savings grow consistently, but the downside is that withdrawals outside the timeframe could be penalized. If you know you aren’t touching that money for a while, this would be a wise choice. For example, Navy Federal provides an excellent option with the Special EasyStart Certificate, offering a 5.30% Annual Percentage Yield (APY) for 12 months with a minimum deposit as low as $50. This can be an ideal choice for those aiming for a specific financial milestone within a set timeframe. - Diversify your savings portfolio
Consider diversifying your savings portfolio by allocating funds to different accounts based on your financial goals and timelines. For example, use certificates for specific milestones with a fixed timeframe, and MMSAs for a balance between liquidity and growth. This strategy allows you to optimize your savings strategy based on the unique features of each account.
This article was sponsored by Navy Federal Credit Union. Navy Federal Credit Union is federally insured by NCUA.
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