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The Freedom 30: Week 3


How it works

The Freedom 30 program is designed to provide a schedule of weekly money well-being mini-projects to complete on your way to greater financial freedom by the end of the year.

The approach is simple: You set aside 30 minutes each week to perform a specific task aimed at improving your financial standing. The tasks will be laid out for you in themed months, so all you need to do is follow the instructions. Make sure to choose a time each week in which you can really put all distractions aside and focus intently. Try to create as calm and pleasant an atmosphere as possible to make the process go smoothly.

Week 3 Project: Understand your savings options

Not all savings options for your goals are created equal. In fact, depending on the timeframe of your ambitions, you may want entirely different savings vehicles. Here are some common accounts in which to stash your cash, grouped by goal timeframe.

Short-term goals

Savings account
You earn a small amount of interest for the money you put into the account.

High-yield savings account
You typically earn a higher return than you would on a regular savings account, but the tradeoff is that you tend to have more significant withdrawal restrictions.

Cash management account
You get a hybrid of a checking and savings account with options for investing and earning at a higher rate than a regular
savings account.

Money market account
You deposit money into an account with a higher variable rate the more money you keep deposited.

Mid-term goals

Certificate of deposit (CD)
You get a higher yield than you would for a regular savings account by agreeing to leave your deposited money in the account for a set amount of time.

Long-term goals

Brokerage account
You have an account for investing your money in various stocks, bonds, mutual funds, or exchange-traded funds.

401(k)
You get a tax-advantaged retirement account offered to you by your employer.

Individual Retirement Account (IRA) or Roth IRA
You have a tax-advantaged retirement account that you control on your own.

Takeaway: This week should conclude with you having chosen the type of savings accounts for each of your goals.

For next week: Reach out to your financial institution once you know which type of savings vehicle you’d like to utilize.

2/22/24

 

 

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