Summary: That spare change in your pocket trickles away, unnoticed. But, if you save it, you'll soon realize that it can add to your financial security. Get a good return on your savings and help your community.
More than one third of Americans — 37% — do not have the money to cover an emergency expense, such as a car repair or medical bill, according to the Report on the Economic Well-Being of U.S. Households in 2019 — May 2020 by the Federal Reserve.
No matter how tough it is to form a good habit, saving money is critical, especially during uncertain times, such as the coronavirus pandemic. If you have a history of being passive about saving money, decide that you want to take charge and put your money to work for you. It is empowering.
Your saving goals can — and should — be more ambitious than just covering an emergency expense. You may want to save to buy a home, go on vacation, pay for your education or that of your children, start a business, or something else. Your wants and desires are only achievable if you have the financial capacity to make them happen. Having a goal makes it easier to be disciplined about saving.
So, too, does setting aside small amounts of money on a regular basis. However, life is busy and full of distractions. It's easy to lose track and forget to transfer money into your savings account regularly.
Automating the process through a transfer from your checking account, makes it easy. If you're setting aside or investing money automatically, it's impossible to forget. You don't have to think about it, and it makes saving one less item on the monthly to-do list. You can schedule these types of transactions to take place after you receive your paycheck, or on a monthly, weekly, or daily basis. The smaller and more frequent the transaction, the less you'll notice the deduction.
And automatic savings are quick and easy to set up. Worthy Bonds can do it for you or your bank may have an easy-to-start program too.
Personal financial advisors often suggest setting up high-yield savings accounts for your automatic savings. A high-yield savings account is free and easy to open. However, the name "high-yield savings" is misleading. The interest rate is variable, but currently, it is less than 1%. With the rise in innovative financial products, you now have other, truly "high-yield" options that not only build your nest egg but that simultaneously support your community. Some of these include smaller real estate investments, as well as Worthy Bonds. These bonds provide dramatically higher yields — 5% annual interest rate — and help growing companies across America.
Another way you can painlessly and automatically save with Worthy is to invest the "spare change" from daily purchases throughout the year with our round-up feature. Simply link a debit or credit card to the Worthy app and every time the card is used, the transaction is rounded up to the next whole dollar (for instance, $1.57 is rounded up to $2.00). That spare change is then tracked and whenever the rounded-up amount reaches $10.00, an SEC-qualified $10 Worthy bond, with a 5% yield, is added to your portfolio.
On average, people using this feature are able to painlessly tuck away about $20 to $30 a month so it’s a great way to add a few hundred dollars a year to your nest egg! Proceeds from selling Worthy Bonds are invested in secured loans to community businesses, so you get an additional positive social impact with every bond purchased!
And, if you have extra cash left over at the end of the month, you can transfer that to your Worthy account. Painlessly, steadily, your savings will add up.