The practice of saving money has been around with us for a very long time. Over the years, it has become important to save for various reasons. Some people save to put a down payment for property, others to pay for school; the reasons are varied. The methods used for saving money are also varied. It can be put in a savings account, or put under the mattress by the real risk takers. One method that has been popular for many years is the piggy bank. But before you go out and get yourself one, there are some things you should consider.
Not for Major Savings
The biggest disadvantage of piggy banks is that you will only be able to save small amounts of money at a time due to the size of it, unless you buy a large piggy bank, which will be able to hold quite a bit of money - especially if you drop in $20, $50 or $100 bills in there. Obviously it can take a log time to save for a house down payment, but it would be quite exciting if you wanted to save for a trip to Vegas, or a night out with the girls or guys.
Are You Disciplined Enough Not to Break The Bank at Will?
It takes a lot of self-discipline for a lot of us to resist the temptation to not spend money that is conveniently close by. The old adage "out of sight, out of mind" applies well in this situation. If you cannot resist dipping in the piggy bank, perhaps you might want to stash your money away in a bank account that you are not easily able to access. However, seeing your large personalized piggy bank as a reminder of your goal will be an encouragement to drop in more money, rather than taking out money.
You Will Not Be Able to Earn Interest
If you choose to put your money in a savings account, it will accrue some interest. This means that it increases in value. In a piggy bank, it is simply lying there, not gaining anything and perhaps even losing its value on account of inflation. But with the interest rates so low these days, there isn't much difference between piggy banks and bank accounts.
All of the above are simple considerations that you must take into account before you decide how you want save for the upcoming goal of yours.
Grace Thompson has raised two financially-savvy kids, while having had a successful career in managing projects with multi-million-dollar budgets.
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