Saving Your Money
Savings helps you reach many of your financial goals, whether they are short-, mid- or long-term. They help you with paying for:
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Education
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Emergency situations
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Retirement
Automatic Deduction from Your Paycheck
One of the easiest ways to save money is to have a certain amount of money from your paycheck be automatically deposited into a savings account. This way you never see the money, but you are allotted a certain amount to save.
Types of Savings Accounts
Individuals have different choices on saving options based on their preferences on time frame, investment expectations and other related factors. For example, if the availability of your money is very short, you don’t want to lock it in a CD account. Here are some of the type of accounts available. For more assistance, ask your financial institution representative.
Savings Account |
Certificate of Deposit |
Money Market |
- Easy to access your money at any time.
- Guaranteed rate of interest.
- Move money easily from one account to another.
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- When you don’t need immediate access to your money.
- Earn interest rate to full term.
- Must leave the deposit in the account for the entire term to avoid early-withdraw penalty.
- Receive principal and interest at the end of the term.
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- Pay no fees if you maintain a minimum balance.
- Earn higher interest rates than saving accounts.
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Understanding Interest & Compound Interest Over Time
When you save money - your money earns interest at a certain rate. The interest amount is added to your original savings amount.
- For example, say you have an original (principle) amount of money = $1,000.
- The account you have deposited it in has a 10% interest rate for one year = $1,000 x .10
- The first year you earn $100 which brings to total to $1,100.
- The second year you earn 10% interest of $1,100 =$110
- And so on.
Example: If you save $25 per month at a interest rate of 4%, you will have $1,675 after 5 years.
5 Years |
4% |
6% |
8% |
10% |
$25 |
$1,657 |
$1,744 |
$1,837 |
$1,936 |
$50 |
$3,315 |
$3,489 |
$3,674 |
$3,872 |
$75 |
$4,972 |
$5,233 |
$5,511 |
$5,808 |
Rule of 72
The rule of 72 tells how many years it will take for you to double your investment. Take 72 and divide it by the interest rate you’re earning. If you’re earning 8 percent, then 72 ÷ 8 is nine years - which means your money will double in nine years.
Interest Rate |
Years Needed for
Money to Double |
Initial Investment |
Ending
Balance |
2% |
36 years |
$5,000 |
$10,000 |
4% |
18 years |
$5,000 |
$10,000 |
8% |
9 years |
$5,000 |
$10,000 |
Resources: http://www.edfund.org/pdfs/Saving_100_Saving_For_Goals.pdf
Savings Tips for College Students
Types of grants & scholarships which either give you free money while you study, or pay you to work while you are in school:
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Graduate Assistantship
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Teaching Assistantship
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Residence Assistantship
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Scholarships
Graduate Assistantship Office of Towson University
Address: 7800 York Road Building, Room 232
Phone: 410-704-4484
Fax: 410-704-3434
E-mail: gao@towson.edu
Financial Aid Office of Towson University
Address: Enrollment Services, Room 339
Phone: 410-704-4236
Fax: 410-704-2584
E-mail: finaid@towson.edu
Food
- Collect coupons and follow the weekly sales at the grocery store.
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If you live on-campus with a meal plan, don’t waste it.
- kip the fast food forays and late night take-out.
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Make your own coffee, save on daily beverages.
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Limit the frequency of eating out.
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Sign-up for coupon offer and saving on discount.
Books
- Borrow books from someone in the college if possible.
- Buy used text books from online or local bookstores..
- Sell your textbooks online or bookstore.
Transportation
- Try to get an apartment that is close to campus so you can walk or bike to school.
Off-Campus living
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Get a studio apartment or split rent with roommates. Rent a place that will have all appliances provided.
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Don’t spend a lot on decorations and accessories.
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Pay utility bills before they are due. Avoid late fees and bad effect on credit score.
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Save on electricity expenses, as they can be costly.
Shopping
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Distinguish between what you need to live versus what you want.
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Patronize places that offer student discounts.
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Shop for stuff you really need during tax-free week. (Annual tax free shopping event in MD beginning on Aug. 8, 2010, and ending on Aug. 14, 2010)
Travel
Financial Services
Administration Building, Fourth Floor (map) (How to use the map link)
Hours: Monday - Friday, 9:30 a.m. - 3:30 p.m.
Phone: 410-704-5269
Fax: 410-704-4910
E-mail: mfortier@towson.edu
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