Is it Better To Save or Invest?

Posted on December 23, 2022January 4, 2023

Is it Better To Save or Invest?

Saving and investing are both important aspects of money management, but it can be hard to decide which option is best for wealth-building. In this blog, we’ll break down how to build wealth through either form of money management and what factors go into the decision between saving your money and investing it.

Benefits of Saving vs. Investing

Saving and investing serve different purposes, but they have a similar goal: helping you accumulate money.

Saving involves deferring money regularly to accumulate over time. This money is generally placed into a savings account at a bank, where it can grow with a modest interest rate. Saving in this way is considered very low risk but does not grow considerably outside what is put into savings.

Investing, in its simplest sense, involves buying an asset with the intention of selling the asset at a higher price. The asset purchased could be a portion of a company through the stock market but also something like a property, bond, or collectible.

Depending on the market or asset, investing varies in its risk, time commitment, and financial benefit in building wealth.

When To Save Your Money

While saving may grow more slowly, it is a very reliable way to work toward your financial goals. Short-term investments, like a home down payment, are best left in savings, where returns are guaranteed and the cash is readily available. Generally, if you think you may need the money within five years, it’s best to place it in savings over investments.

It’s also wise to build healthy savings before considering investing. While you may want to diversify your finances, it’s smart to put away at least one month of your total expenses before investing. Savings of around six months of expenses is often considered to be a strong savings goal.

When To Invest Your Money*

Investing money is a long-term game. Consider your financial goals, debt, and emergency funds to determine what and where you’re willing to invest.

A first step is often opening a retirement fund. A retirement fund puts money into diversified, secure, and long-term investments. If your employer offers a 401(k) or another retirement savings plan, they may also match your contributions to that fund up to a specific amount.

Then, if you’re fortunate enough to have healthy savings and are regularly maxing out your retirement contributions, investing in a brokerage, bond, or another asset may be your next move.

Investing in Individual Stocks

If you have a sizable nest egg built up and you consider yourself fairly business-savvy, you may consider investing in individual stocks you believe have high growth potential. Investing this way is even higher risk than investing in a standard portfolio, but if you choose the right stocks, you can see much faster growth.

Should I Save or Invest?

Generally speaking, it’s a good idea to save and invest simultaneously. Saving is low-risk and allows you to have easily accessible liquid cash that can be used in case of emergencies. Investing can be a higher risk and makes it difficult to access your money but is usually more effective at building wealth over time.

If you’ve saved enough money to cover at least six months of expenses and you’re not saving for any specific goals, like college tuition or a home down payment, you can shift your strategy to favor investing over saving.

However, even if you don’t have as much money saved as you would like, it doesn’t hurt to invest a small portion of your income. Especially if you’re a young adult, putting money into a 401(k) or Roth IRA each month is a great way to save for retirement and is much lower risk than putting your money into individual stocks or startups.

Maximize Your Savings and Growth With Landmark National Bank

With several high-interest savings options, Landmark National Bank can give you a safe place to keep your money and help it grow. Or with our certificate of deposit and IRA options, you can set yourself up for long-term financial success. Find your nearest Landmark National Bank Branch and open an account today!

*Investments are not deposits, not FDIC insured or insured by any Federal Government Agency and may go down in value.

How to Build Your Savings Account

Posted on July 11, 2022June 30, 2023

Building Your Savings Account

We all need a financial cushion, especially in today’s uncertain economic climate. From emergency funds to funding retirement, knowing how to build savings is a must. Whether you haven’t set anything aside yet or want to grow your nest egg, these tips will help you maximize your savings account.

Get Serious About Budgeting

No matter what their perspective on money matters, most financial experts agree that a budget is a must. If you’re wondering how to grow your savings, you can’t go wrong by downloading a budgeting app or software; a spreadsheet or notebook will also do the trick. When assigning your money to categories, be sure to allow for a little “fun money” to avoid deprivation-fueled splurges.

Cut Costs

For anyone learning how to build a savings account, trimming some frills from the budget frees up more cash for the important things. It isn’t necessary to cut all your wants to save up for your needs, though.

Start out by looking for “leaks” in your budget like streaming services, meal kit subscriptions, or gym memberships you never use.

Keep the things you love, but cut those expenses that don’t add to your health, wealth, or happiness. The library is a great source for free movies and music as well as lectures, classes, and, of course, books.

Build on Rewards

Repaying your loans, credit cards, and other bills on time can help boost your credit score. A higher credit score can also translate to better interest rates, fewer fees, lower insurance premiums, and other financial perks. And paying off debt altogether frees your money for bigger, much better things.

Maximize savings even further by earning rewards for everyday shopping with Landmark National Bank’s Visa My Rewards Gold and Platinum debit cards.

Grow Your Income

Making more money is an excellent option for anyone wondering how to build a savings account. Here are some ideas for increasing your income:

Ask for a raise
Start a side hustle
Pick up overtime when possible
Earn money in your free time with online surveys or by performing tasks at sites like Amazon’s Mechanical Turk

Investing can help you maximize savings over time, but there’s a learning curve. And don’t expect to make fast money; whether you go with crypto, real estate, mutual funds, or the stock market, investing is a long-term endeavor with the potential for plenty of ups and downs.

Save, Save, Save

If you’re trying to figure out how to build savings when you don’t earn a lot of money, you’re not alone. Try these tips to lower your monthly bills:

Grow your own food
Use less gas by planning errands
Browse your own kitchen before heading to the store
Plan meals to minimize eating out and cook more efficiently
Lower your thermostat one degree in the summer and raise it one degree in the winter
Cut small costs (watch trial subscriptions and cancel unused or unneeded memberships)

If you own a home, lower utility bills and costs by replacing worn weatherstrips, caulking gaps around windows and doorways, and repairing plumbing leaks.

Learning how to grow your savings goes a long way toward building and maintaining your financial wellness.

Landmark National Bank can help you achieve your goals with a wide range of financial products. From interest-earning checking and savings accounts to debit reward cards, you’ll find just what you need to maximize savings for your financial future.

Find a Landmark National Bank branch location near you and open a savings account that fits your needs.

5 Must-Know Financial Literacy Topics

Posted on April 14, 2022June 30, 2023

Five Must-Know Financial Literacy Topics

Knowledge is power, but it’s also health. With the right information and understanding of certain subjects, the way you treat money can entirely change—hopefully for the better. It’s Landmark National Bank’s goal to make sure as many people are financially literate as possible, so we as a society can make well-informed decisions beneficial to ourselves and others.

To meet that end, in the spirit of financial wellness month, we’ve compiled a brief primer of five of the most important financial literacy topics that we think everyone should know. Hopefully, we’re able to provide you with an intuitive explanation of these subjects so that if you haven’t started to think about them yet, you can begin now.

Why is Financial Literacy Important?

Financial literacy is important because it helps you understand the best ways to use your money in both the short and long term. When you’re skilled and smart about your money, you’ll find yourself less financially stressed, less wasteful, and better able to pursue your goals as it relates to your monetary status.

#1 – Personal Financial Management and Earning Money

Also known as PFM, personal financial management is the simple practice of organizing and tracking your spending, accomplished through the use of a budget. A budget is a plan that helps an individual or family understand what they can and cannot afford, what their anticipated expenses are, and how to measure their different income streams, among other goals orbiting finances. Mastery over a budget and PFM can empower people to feel more in control of their money.

#2 – Protection and Insurance

Insurance exists as a countermeasure against potential loss. In exchange for a premium—a certain agreed-upon sum of upfront payment—as well as consistent, ongoing payments, an insurance company will agree to financially support an individual or company should misfortune befall them in the future. The exact policies and conditions are subject to change based on the insurance company, as well as the type of insurance you’re securing, so it’s important to carefully consider your needs and what insurance might benefit you the most.

Some common types of insurance include: health insurance, life insurance, travel insurance, car insurance, property insurance, liability insurance, and disability insurance, among others.

#3 – Spending

We spend money for a nearly endless variety of reasons. We need to spend money on monthly and annual bills, subscription fees, mortgage/rent, groceries, recreation, property upgrades, medical premiums, and so on. By spending money, we’re stimulating the economy, upholding our responsibility as citizens, and enriching our lives through the things we love.

In the discussion about why financial literacy is important: this is why it’s important to spend money effectively, taking us back to PFM and the power of a good budget. When we know our money coming in versus money going out, we can take the steps to spend money in intelligent, well-considered ways.

#4 – Borrowing

Among the financial literacy topics, understanding the importance of borrowing money is critical. Poor borrowing decisions can deal tremendous damage to the long-term health of your budget and lifestyle, chaining you to frustrating, nonoptimal repayment plans. But loans themselves are not the enemy, and can serve as a boon in some circumstances.

A well-chosen loan can help you out of an unexpected emergency scenario, get your promising new business on its feet, or allow you to make an important life transition. Before committing to any new loan, ensure you understand the institution behind it, the terms and conditions, interest rates, additional costs, and any involved collateral. All of these details should be outlined in the contract you’ll be asked to sign.

#5 – Saving and Investing

Essential to the financial literacy training experience is the understanding of how saving and investing can elevate your financial portfolio. You’ll find many practices surrounding exactly how much you should save and when; but virtually every source of wisdom agrees you should be saving something.

A good savings account can provide lucrative benefits, such as making you more money the longer you have cash sitting in it. Other healthy practices include:

Not spending all of your money as soon as it comes in
Stowing part of it away in case of emergency
Saving money in anticipation of a large purchase, like the down payment on a car

Investing is an extension of saving. It’s wielding your money in a way that the money is allowed to grow on its own. Like everything else on this list, investing is an entire skill unto itself, and can take years to cultivate. However, a strong investment profile can create unrivaled financial security and generate you wealth in addition to your income.

Learn More and Live More with Landmark

The learning never stops. Though we’ve covered some of the basics, remember each of these financial literacy topics can go far deeper. The benefits you can reap from high-level literacy are worth the effort necessary to master each of them.

To continue in the spirit of financial wellness month, Landmark National Bank would like to encourage you to explore the benefits of our personal savings account, designed to help you earn interest and invest in your future. This is a great next step toward learning how financial literacy is important, and how it can directly improve your life.

Find a Landmark National Bank location near you to talk to a banker about your financial needs!