How to Save and Build a Better Future

The concept of saving isn't hard to understand but actually doing it—especially at a young age—may prove to be a challenge. Learning how to save is an essential step in gaining financial independence and while it can be difficult, it certainly isn’t impossible. With a solid plan and the right tools, you’ll be well on your way to constructing a path towards a prosperous financial future.

Before you get to saving, it helps to know what you’re saving for. Your savings goals can be aimed at anything from a new jacket to bigger budget items like a vacation with friends, whatever it is, it’s a good idea to know how much money you’ll need and how long it’ll take you to reach that goal. 

Try setting some achievable short-term goals like saving for a video game or a pair of shoes to get started on saving. Reaching these smaller, fun goals will help you create a habit out of saving and give you the encouragement to keep going towards long-term goals like saving for a down payment on a new car.

 

Finding a balance between spending and saving is important to any savings plan. Keeping track of how much you spend and how much you earn will help you figure out how much you can save and even find areas where you can cut costs. If going out with friends is taking up a big portion of your budget, you might want to consider shifting some of that money towards your goals instead.

 

Now that you have a comprehensive view of your money flow, you’ll want to start building. Knowing where to put your money will help you maximize your funds. Whether you should put your savings into a traditional savings account like Hughes’ Youth Savings Account or a certificate account (also known as a certificate of deposit) depends on your goals. For short-term goals that range from a few months to a year, a traditional savings account would work best as it gives you easy access to your money. Certificate accounts offer higher dividend rates but locks in your money for a specific amount of time known as a term (can range from 6 months to 36 months) which means you won’t be able to access your money until the term has ended.