1 in 5 Millennials Has $0 in Savings -- and That's a Big Problem
KEY POINTS
- It's important to have money in savings to pay for unplanned expenses.
- Without savings, you might land in costly debt when unexpected bills arise.
- There are steps you can take to build savings, like budgeting carefully and working a side job.
A $0 savings balance could really hurt you when an unplanned bill strikes.
Building savings isn't always an easy thing to do. In fact, it's often quite difficult.
But it's important to have money in a savings account for unplanned expenses. If you don't have a solid emergency fund, and you're hit with an unexpected bill you can't put off, like a home or car repair, you might instantly be forced to rack up credit card debt to cover it.
Credit card debt can be really bad news. Not only can it cost you a lot of money in interest, but it could also leave you vulnerable to credit score damage. And the lower your credit score, the harder it becomes to not only borrow money when you need to, but also, do things like rent an apartment.
Meanwhile, a recent survey by Real Estate Witch found that roughly 20% of millennials have no money in savings whatsoever. If that's the boat you're in, make these important moves soon to build yourself some sort of financial safety net.
Our Picks for the Best High-Yield Savings Accounts of 2024
SoFi Checking and Savings
APY
up to 4.60%
Rate info
You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn
$0
|
APY
up to 4.60%
Rate info
You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
|
Min. to earn
$0
|
Synchrony Bank High Yield Savings
APY
4.75%
Rate info
Our Disclosure: Annual Percentage Yields (APY) is subject to change at any time without notice. Offer applies to personal accounts only. Fees may reduce earnings. For High Yield Savings accounts, the rate may change after the account is opened. Visit synchronybank.com for current rates, terms and account requirements. Member FDIC
Min. to earn
$0
|
APY
4.75%
Rate info
Our Disclosure: Annual Percentage Yields (APY) is subject to change at any time without notice. Offer applies to personal accounts only. Fees may reduce earnings. For High Yield Savings accounts, the rate may change after the account is opened. Visit synchronybank.com for current rates, terms and account requirements. Member FDIC
|
Min. to earn
$0
|
Capital One 360 Performance Savings
APY
4.25%
Rate info
See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn
$0
|
APY
4.25%
Rate info
See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.
|
Min. to earn
$0
|
1. Get on a tight budget
Not having savings is a dangerous thing. If your savings account balance is sitting at $0, it's time to take control of your spending and find ways to cut back on expenses. And getting onto a budget is a good way to go about that.
Your budget doesn't have to be anything fancy. You can write yours down on paper or use a spreadsheet to map out your bills. You could also try using a budgeting app. Many of these apps will assign your purchases to different spending categories so you're able to keep track of them easily.
But either way, the point is to see where your money goes month after month, and then do your best to bank more of it. That could mean canceling expenses like streaming services, subscription boxes, and your gym membership. It could even mean doing things like getting a roommate to split the rent with -- despite the hit to your privacy that might ensue.
2. Pick up a side hustle
If you're already living pretty frugally, cutting back on expenses may not be all that feasible or reasonable. But in that case, a second job could be your ticket to building up a savings balance.
Explore your options for working a side hustle that will earn you a nice amount of money. If you're great with kids, you could look into babysitting or tutoring. If you love animals, be a dog-walker or pet-sit in your home for people who need to go away. You can even revert to work-from-home jobs like data entry if they do the trick of putting more money in your pocket so you can put some cash in the bank.
Going without savings leaves you vulnerable to debt, and that's really not something you want. Rather than run that risk, make an effort to build your savings. It may take some time, but any balance you accumulate will be far better than a balance of $0.
These savings accounts are FDIC insured and could earn you 11x your bank
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.
Our Research Expert
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
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