What's up, travel lovers? Welcome back tomy channel! In today's video, I'm gonna be talking about the importance of settingup a dedicated bank account for your travel savings and what to consider whenfinding one that is right for you.
Ready? Let's get started!I'm Amy, A Traveling Broad.
If this is your first time here and you are excitedto make travel part of your life, make sure you subscribe to my channel and hitthat bell so you get notified every time I post a new video because you don'twant to miss anything! This video is part 2 of a 4-part series on settingyourself up for travel success.
if you missed the first video, “Why and How toCreate a Bucket List, ” be sure to watch it right here.
One way to make travel a partof your life is to open a dedicated savings account.
The reason you don'twant to mix your savings for travel with money that you use to pay everydayexpenses is if you open a separate account, it's kind of “out of sight, out of mind” soit's just going to be able to build without you really think about it.
Andthe other reason is a lot of times, things come up that we need money for.
Say you need a new tire or an appliance breaks down, etc.
and youneed to replace it, you don't want to take money out of an account that youset aside for this special purpose.
Opening a separate account is criticalfor you to make this dream a reality.
Not all banks – or bank accounts – are createdequal.
We're gonna go over some of the things that you need to consider whenyou're choosing the right account for your travel savings.
And when I say “travelsavings, ” I'm not necessarily saying “savings account.
” It's a bank account thatyou're using to save money for your future travels, okay? Now, with that out ofthe way, let's talk about a couple things.
There are mainly 2 options for savingmoney: there are traditional banks and there are credit unions.
Let's talk about thecharacteristics of each of those.
typically, there's alot of branches that you can choose from.
They're usually quicker to roll out newtechnology such as mobile apps.
Credit unions, on the other hand, charge lower fees, may offer higher rates, and they place more of an emphasis oncustomer service.
Credit unions often require certain memberships, so make sureyou look into that before you decide to open an account there and make sure youqualify to do so.
You're probably wondering what type of bank accountshould you open.
Should you open savings or should you open checking? Let's talkabout the characteristics of both and which one may be better for you.
So firstoff , let's talk about checking.
There are several pros to opening a checkingaccount.
Checking accounts are meant for everyday use and they give you easyaccess to your money, there are no limits to the number of withdrawals ortransfers you can make each statement period, and they offer a variety of waysto make payments.
And as long as the bank is insured, your deposits are insured upto $250, 000 dollars.
A few cons of checking are they usually pay low orno interest, some to require you to maintain a specific minimum balance oryou are charged a service fee, and if you overdraw your account, you'll be chargeda fee for insufficient funds.
Now, savings accounts have pros and cons as well.
Ssomeof the pros are that they are better for stashing cash and your money is prettyliquid.
You can make up to 6 transfers or withdrawals per statement cycle.
Savingsaccounts also earn interes, t which is free money to you.
And most come with ATMaccess.
And just like with checking, if your financial institution is insured, your deposits are insured up to the $250, 000 limit.
Now, some ofthe cons of savings accounts are you have limited access to your money.
Iknow that this was also a pro – the 6 transfers or withdrawals allowed forstatement cycle – but 6 really isn't a lot.
Another con is interest rates onsavings accounts may be lower than you could get on a money market account or acertificate of deposit.
One last consideration is where you open youraccount.
Should you open it at a traditional brick-and-mortar or shouldyou open your account and online bank? Traditional banks offer convenience anda more personal experience and these banks may offer access to a wider ATMnetwork.
Cons of traditional brick-and-mortar banks are that the feesand the interest rates may not be as competitive as an online bank.
bankshave pros and cons as well.
The pros are that they're open 24 hours a day, 7days a week, 365 days a year; typically offer more competitive interest ratesand charge lower fees because they don't have the overhead, and your money isavailable to you wherever you have an internet connection, so you can go onlineany time of day or night and do a transaction.
One of the cons issometimes, transaction may take a little bit longer at an online bank.
When you'reopening your account, here are the things that you want to consider.
Youwant to make sure that the bank or credit union you choose is insured, thereare low or no fees, no minimum balance requirement, free access to ATMs, andmobile and online access.
The whole point of this travel savings is to ACCRUEmoney, not to pay fees, so that's something you really need to look for.
two of my favorite online resources are Bankrate.
com and NerdWallet com.
Both ofthem have very comprehensive information, they have financial calculators, they have lists of the best accounts for each month, and they're updated regularly so theinformation is very current.
So below this video, I'm going to put some linksto pages on both of those sites that I think will help you as you do yourresearch.
Now I know that we went over a LOT of information and your head may bespinning, so I put together a quick resource that you can download below.
It'll give you something to refer to you as you try to find the bank account that's right foryou.
The hardest thing to do is take the first step.
Now, don't delay doing this!Get that bank account open.
Even if it's just with $5 or $25.
Once you do, I promise you you'll be SO glad that you did! If you haven'talready done so, be sure to hit the subscribe button and click the bell soyou get notified every time that a video goes up.
Thanks for watching! I'll see youin the next video.