Saving for the future
By Joshua J. Garza | Pulse Staff Reporter
Saving money for the future is like wearing a life jacket when you swim. It saves people from drowning.
One benefit of saving money is having funds available when an emergency arises. It eliminates the need of having to borrow money, which means you do not have to pay back the money with interest when taking out a loan or using a credit card. Interest is the fee you pay the lender in exchange for borrowing the lender’s money. That interest can sometimes equal as much or more of amount borrowed when it is paid off.
“One reason you want to save money is for emergencies,” said David Rodriguez, financial education advocate for Generations Federal Credit Union. “Other reasons to save money are to reach your goals, be financially stable and healthy, gain capital, and to avoid borrowing or owing others.”
Generations Federal Credit Union offers financial literacy classes to Palo Alto College students on Tuesdays from noon to 1 p.m., in Room 101, of the Student Center. The classes encompass topics such as budgeting, credit cards, identity theft and preparation for large purchases. The courses are also tailored for students’ specific needs.
“Saving money allows you to enjoy life comfortably,” said Kimberley Blohm, student brand manager for Generations Federal Credit Union. “You can take vacations and live freely without having to rely on others.”
Students may access the student life website/blog to learn more about various money related topics at http://www.mygenfcu.org/student-life. Generations has a students-only Facebook page, where financial tips for students can also be found: www.facebook/com/MyGenLifeSA.
A good reason for saving money in a credit union or bank is to accrue interest. If you hide $100 under a pillow for a year, there will only be $100 there when you look for it. In a bank or credit union, you’ll have $100 plus the interest you earned.
Savings accounts accrue a percentage of interest per month. A basic savings account starts at a lower interest rate, but with more money in an account that is left for a longer period of time, you may qualify for higher rates through Generations. Interest rates vary by bank.
“My grandmother started saving money for me when I was a child. She would deposit money for me every birthday and Christmas. Although, it was a significant amount that she deposited, leaving it there to add interest definitely added up,” said Kelly Lamons, a senior Advertising major at The University of Texas at Austin. “I had access to it when I was 21, but set it up where I cannot touch it without a penalty until I am 25. By then it will be a little less than half a million dollars.”
It is your choice whether you want to sink or swim. Saving money is not a bad life jacket to have.
For more information on Financial Literacy, contact Kimberley Blohm at Kimberley.Blohm@mygenfcu.org or visit www.feedthepig.org