Get the Most from Your Savings

Get the Most from Your Savings

No one will argue against the importance of socking away money for a rainy day, but how many of us feel like we are saving enough?

You’ve heard this advice many times before: For yourself, aim to keep six months’ to one year’s worth of expenses in an easy-to-access emergency fund; for your business, another six months’ worth of operating costs.

Even with that common knowledge, just 29 percent of Americans say they have that level of emergency expenses saved. Another 23 percent admit to no savings at all.

Whether for yourself or your business, the reasons for spotty saving are usually the same. Maybe you keep most of your money in checking accounts. Maybe you have a plain Jane savings account with low interest and high balances. Maybe you’ve been putting off saving altogether.

Now is the time for a savings check-up and plan to catch up. These tips can help you protect and grow the money you set aside for later.

Shop around, but not just for rates.
Interest rates are important, but they shouldn’t be the only factor you consider. Get recommendations from your family and friends. Think about banks you’ve used before. Who gives the best service? Where are your other accounts? It might be advantageous to streamline your accounts so everything is at one bank.

You can have more than one account.
Different accounts can serve different purposes. If you have a large amount to put away (or plan to have a large amount in the future), a CD can offer better interest rates over the long term. The drawback is that you do give up the ability to access your money any time you want. Money market accounts are a good alternative, offering competitive rates and easy withdrawals when needed. And of course, don’t forget about retirement.

Make it a habit with automation.
Automatic drafts and direct deposit are your friends! Once you know how much you want to set aside, set up an automatic transfer to make it happen. Many employers even let you split your direct deposit between two accounts. Take advantage of every opportunity you have to eliminate savings from your to-do list and thwart the temptation to spend a little extra.

Don’t touch it unless you have to.
Emergencies happen. If you absolutely have to dip in, you’ll want an account that lets you with no hassle. Money market accounts usually allow for easy withdrawals and deposits, though you may be charged a service fee depending on the size of your balance. For CDs, you may pay a penalty for early withdrawal before the end of its term. 

You would be surprised how quickly your savings can accumulate when you make a plan and follow through. It is critical to be prepared for the unknown in your life and at your business. Even if you don’t need to tap into it, the peace of mind makes it all worthwhile.


Jimmy Moncrief is a financial advisor based at Pinnacle's Broad Street office in Chattanooga, TN. He can be reached by phone at (423) 386-3424 or by email at

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