Saving Money

Did you notice the need called “Savings”? Another need that many people forget about is savings.  When you save money, you are setting it aside so that it collects and grows from one month to the next.  The best rule of thumb is to put a dime for every dollar you receive into a savings account at the credit union.  In our Budget sample, we show $10 for Savings - that would be one dime for each loonie of the one hundred dollars earned.


When you save your money in a savings account, the credit union will protect your money and will pay you a small amount of money for keeping it in the account.  That payment is called Interest.  When you save money in a savings account, you EARN interest on that money.  When you borrow money from the credit union, you PAY interest on the money you borrowed.
When you save money over a long period of time, you could earn interest.  Interest is a percentage of the amount you saved paid to you by the credit union. 

Starting your savings account early gives you a longer time for your money to grow.  Here’s an example.
On her 10th birthday Jenny decides to save $10 a month.  She finds a pretty jar and paints it bright green, then she puts her $10 in the jar and tucks it way back in the garden shed.  Each month she pulls out the jar and puts in another $10. Years go by and Jenny sticks to her routine. 
Jenny’s Uncle Larry is curious about Jenny’s savings.  He decides he will start saving $10 each month too.  Larry is 25 and already has an account at Crossroads Credit Union, so he asks the Credit Union to move $10 from his chequing account to his savings account every month. 
Brenda is in Jenny’s class at school and she wants to save $10 each month too.  Brenda’s mom suggests that she open a savings account at Crossroads Credit Union.  Every month Brenda and her mom visit the Credit Union to deposit $10 into Brenda’s account. 

On Jenny’s 60th birthday she invites Uncle Larry and Brenda over for some birthday cake and they decide to compare their savings totals. Each of them saved $10 per month but Uncle Larry saved for only 35 years while Jenny and Brenda saved for 50 years.  Looking at the chart below, do you see the difference?
 
  Monthly Amount # years saving Interest Rate Total
Jenny $10.00 50 0 $6,000.00
Uncle Larry $10.00 35 1% $5,026.00
Brenda $10.00 50 1% $7,780.00

By starting later than Jenny and Brenda, Uncle Larry loses out on fifteen years of compound interest. But Jenny misses out on the interest too because she put her money in a jar in the garden shed!  Saving is important, and making sure you save the right way is important too.  The credit union can help explain saving and interest.

Can I open an account at Crossroads Credit Union?
We have two accounts especially for our younger members.  Call or drop in and ask us about Starter and Transition Accounts.

Return to Kid's Corner or Return to Young Account Packages
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