Watching Your Wallet: Getting a head start on saving money

FRESNO, Calif. (KFSN) — When struggling to pay down debt, building a future “nest egg” may not be top of mind.

Financial experts say building a savings or a small emergency fund absorbs the shock of any unexpected costs, preventing you from relying on high-interest credit cards that can lead to even more debt.

“What I always like to tell people is pay yourself first,” says CEO of The Academy of Financial Education, Samuel Molina. “Even if you have credit card balances or personal loans, you want to make sure you pay yourself first.”

Think you don’t have the self-control? Treat savings as though it’s a fixed expense and automate transfers to a high-yield savings account.

“When you get that paycheck, whether it’s $20 or $200, each paycheck, you’re putting that away, then you’re going to pay your bills and have fun with the rest of that money,” Molina said.

Molina says consistently setting aside even small amounts builds a secure financial future.

“The interest rates are determined by the bank and what the Federal Reserve decides to do,” he said. “If the Federal Reserve decides to cut interest rates, then the bank will cut interest rates. If the Federal Reserve decides to increase rates, then the bank will increase rates.”

Determining how long you want to keep your money in a high-yield savings account.

“With a CD account, it’s kind of immune to what the Federal Reserve decides,” Molina said. “If you sign a contract saying for six months, I’m going to get five percent, then it’s going to sit at 5 percent at six months or one year.”

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