The testimonial featured in this blog post is from a member of another credit union and does not represent White River Credit Union’s views. Opinions expressed are solely those of the individual.
A credit union member’s savings tips
Regular vacations are essential for maintaining good mental health. Taking a break from the daily routine can help relax the mind and reduce stress. However, if you fund your vacation using credit, especially at a cost that you cannot comfortably pay off in a short period of time, it may cause additional financial stress.
One credit union member, Steve N., and his family save up for their annual vacations well in advance with the support of their credit union. And no, he’s not adding his money into a piggy bank or a typical savings account. He and his family use specialized accounts to help grow their money and keep it safe. Steve writes:
“Every year we start saving for our next vacation as soon as we return from one. Each month we transfer a fixed amount out of our checking account into a money market ‘vacation account’ that receives a higher rate of interest. My wife and I agree to use this account only for vacation savings.”
For any successful family budget goal, you must have buy-in. He continues:
“In addition to our monthly transfer, we have an agreement to deposit every gift of money we receive—from Christmas, birthdays, whatever—into this account. The same goes for any rebate checks we receive from product purchases during the year. Basically, every little ‘extra’ check we receive goes directly into this account.”
Periodically, Steve and his spouse withdraw funds from their savings account and invest it in a short-term certificate of deposit (CD) to earn a higher rate of return. According to Steve, they have CDs maturing almost every month, which they can then deposit into their savings account designated for vacations.
How to start saving
Steve and his family are doing several smart things that you, too, can apply to any savings goal:
- They have a goal—to vacation without borrowing money.
- Establish a clear objective to fund your vacation through savings, avoiding reliance on loans or credit cards.
- The goal has a deadline—the date of the next vacation.
- Set a specific deadline for achieving your savings goal.
- They automate their savings—it’s easier to save when it’s done automatically and not randomly.
- Utilize automated transfers from your primary bank account to a dedicated vacation savings account, ensuring consistent contributions without manual intervention. WRCU offers Online Banking to help members set up automated transfers.
- They agree on the strategy and work together.
- Collaborate on developing a savings strategy, ensuring mutual agreement on financial goals, budgeting decisions, and savings priorities.
Call White River Credit Union to start saving
This is just one way to save for a specific goal. White River CU offers Save for Something Accounts, which are ideal for saving for your next vacation! If you want to learn other ways to reach your savings goals, stop by the CU or call us at (360) 825-4833.
Article originally from CUNA Creative Hub.
