Since we were children, every Sunday our parents gave us an amount of money to buy what we wanted or save, but let’s be honest we did not have a good habit of saving and that is reflected when we are adults, as we grow we acquire more responsibilities, such as personal expenses, paying the rent of a house or buying our own house, buying a car or taking that trip that we want so much.
Since we do not have good financial habits, saving sometimes seems quite difficult to do on our own, some companies promote this activity to promote financial health and today there are countless mobile applications that help you organize and keep better control of your your money, as well as your expenses.
Currently there are various financial instruments that promote savings with different strategies and among them is a personal savings account, but let’s not confuse ourselves with a savings fund, it seems that they are quite similar terms, but each one has different objectives. At Resolve your Debt we want you to stay as well informed, so we will give you a brief explanation of the difference between them, but first let’s understand what a savings account is.
A personal savings account It provides a great opportunity to save money if our income is limited and have that amount available in the event of any emergency or circumstance that arises, they emerge as a support instrument thanks to their great flexibility, these are associations or entities of people who are created with a common purpose, you have the freedom to set the amount you want to pay for a certain period, it is money that you allocate from your salary (no more than 30% by law). The amount is agreed upon by you with your company and is allocated each month to your savings.
If you want to know more in depth what a savings bank is, we invite you to visit our content on What is a savings bank? And keep you better informed.
What is the difference between a personal savings account and a savings fund?
In a savings bank, companies generally promote it among their employees, but it is completely optional, deducting a certain amount from your salary so that it is delivered to you when you require it or access a loan, on the other hand, you can contribute on a weekly, fortnightly and monthly basis, allocating this savings to fulfill your plans or cover an emergency.
A savings fund is mandatory for some companies that provide this benefit, in which a percentage of your salary is discounted for the fund and another portion is contributed by the same company to be invested and thus obtain additional income to your salary Unlike a savings bank, workers only access it on set dates, which are usually at the end of the year. If you want to create your own savings fund, we share the 5 steps you must follow to achieve it.
What are the benefits of a personal savings account?
By voluntarily joining a savings bank, you will notice great benefits over time, let’s remember that we must be patient if we want to meet our goals in the future, we want to share some of the advantages that you will acquire with a personal savings account and put it into practice as soon as possible.
- You can rest assured that your savings will be safe, since these are regulated by the Banking and Securities Commission (CNBV) in charge of regulating and supervising the various sectors and financial entities in Mexico.
- You will get a higher yield than if you do it individually, as it is placed in investments, its main objective is to grow your capital.
- You will have the great advantage of accessing short or medium-term loans from your company, which are usually more efficient thanks to their credit rates that are applied, unlike a savings fund.
- A savings account is not mandatory, as a worker you have the option of joining it or not.
- You are the one who will decide the amount of the withholdings that will be made periodically from your salary
- The company is in charge of deducting this amount of money that you set, making saving easier.
- You get to have your savings at the time you need it, being an instrument with great accessibility and flexibility.
- You will choose the term and periodicity of the contribution that best suits you, be it weekly, biweekly or monthly.
How to make a savings account?
To create your own savings bank, you need a lot of discipline and, above all, be very aware of our income. Sometimes we buy objects or spend on things that are not really necessary, reducing our income and reducing the possibility of periodically making savings.
Allocate a part of your salary or salary to create your own personal savings accountthis will help you as a fund to improve your financial life, whether it helps you get rid of an emergency or for unexpected expenses.
With the help of a table or application, keep track of all your financial movements, allocate a certain amount to each need you have, such as personal expenses, the payment of various services, the payment of your rent or your house, expenses for entertainment and the amount that you will allocate to your savings.
One way to improve your financial habits is to be able to identify those ant expenses that we make, from buying a coffee, clothes that we don’t really need, buying an object and that are really unnecessary expenses, that if we add these up you will be able to perceive that it is a great amount that you could allocate to your personal savings account
The purpose of these savings banks is to ensure your well-being and part of your heritage. We know that we cannot prevent the future and that it is better to believe that nothing terrible will happen. But the reality is that sometimes this is the case.
In this case, it is possible that you do not know for sure what to do with money that you probably did not plan to receive. You will have to be very careful, because bad administration and the emotion of the moment could make you spend your savings account without having some kind of strategy. The question here is what would you do with that savings?
What can I invest my savings account in?
We can have many plans in mind about what we can do with our money, but you must plan it very carefully and allocate it to something you really need or meet those objectives that you have been planning for so long, so that you can do it intelligently, we share some tips that You have to take into account what you can do with your savings account.
- invest in you. Your person is the best investment you can make in your life. For example, investing in creativity, in your physical or mental health, in improving your personal image or doing some sport. This may give you the necessary tools to be more confident when it comes to going out into the real world, working or making decisions. Or, pay your debts for your peace of mind.
- Invest in your education. It is true that the money we invest in our knowledge multiplies once we enter the world of work and are productive. Do you remember that diploma that caught your attention so much? It may be time to take it.
- Save money. Ideally, you should allocate part of your savings account for the future. That amount should cover at least 6 months of the lifestyle you lead now. Why? Because we will never know if the job you have will continue to work as well as now or if you would like to make a change of plans in your professional life. For both situations, it is better to be prepared, have a plan B and enough capital to carry it out.
- Invest and grow your savings. The surplus of that money saved, you could invest in what you think is most convenient. There are different financial products that could give you a good return. Review each one of them, analyze in detail everything they offer you and compare. In the end you will be able to choose the one that best suits you and instead of having your money saved for no reason, it will be protected giving you profits that you will later appreciate.
There are other ways to save and grow your money
There are platforms such as P2P lending in which you could allocate that money to personal credits that users use to conclude or undertake projects. Improve your personal finances or fulfill a life goal or dream.
This model of loans between people has been carried out for a long time, but they were exclusive transactions of the bank or large companies that spent too much time in bureaucracy and paperwork. Now, thanks to technology and development, there are many companies that are dedicated to carrying them out through online, regulated platforms and facilitating the process.
If you’re about to receive the savings you put in a lot of effort during the year with the help of your company, it’s important to stay calm. Remember that it is a good time to plan what you would like to do with it, and better yet, invest it in something that will give you profit.