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Jun 21

What’s The Best Account to Open to Save Money for Traveling

What’s The Best Account to Open to Save Money for Traveling

Cindy’s Question:

I want to start saving money. But I don’t know what sort of account would be best. I want to start travelling when I’m 22. I currently have a full time job, so I’m earning a living

Ryan’s Answer:

You need to answer these first:
1.) Roughly, how much will you need at 22 when you begin traveling
2.) Does where you work offer direct deposit?

I suggest you open a checking (free if you can find it) for your operating expenses and a savings account. Savings accounts do not earn a lot of interest, but right now there isn’t much that does. The reason I asked about direct deposit is because you can have a portion of your savings directly deposited into the savings. Out of sight, out of mind.

Be careful. Some savings accounts have a minimum deposit amount our you will have to pay a fee. Make sure to ask the Banker you work with to fully explain the Schedule of Fees when you open your account.

Making saving automatic is the key to having it stack up faster. It keeps your hands off for an “emergency” too.

Once you determine how much you will need, work the math backwards to determine how much per check you will need to hit your goal.

NOTE: You ABSOLUTELY NEED an emergency fund of roughly $1000 that you do not touch. When you are working your math backward from the amount you will need to take on your trip, make sure you add the $1000 to it.

Try these for additional resources.
The Total Money Makeover: A Proven Plan for Financial Fitness (3rd Edition Revised and Updated)
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish RichRetirement Planning Books)

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