The views expressed in Economy Matters are not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.
Editor's note: Throughout Economy Matters, "Southeast" refers to the six states that, in whole or in part, make up the Sixth Federal Reserve District: Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee.
Financial Tips from the Atlanta Fed: Saving Strategies
February 25 to March 2 is America Saves Week, which provides an opportunity for individuals to evaluate their savings status and explore ways to meet their personal financial goals.
- What is the difference between saving and investing? Investing is a long-term commitment to put money away and let it grow, while saving is designed to help meet short-term goals and unexpected shortfalls.
- If you are unsure about how long it will take for your money to grow, there is a simple calculation that will help you. The Rule of 72 estimates how long it will take your money to double with compound interest as you consider various account options for saving money.
- One saving tactic is to establish an emergency fund that can be accessed quickly for unexpected expenses. The recommended amount for an emergency fund is generally three to six months of living expenses.
Saving is a habit that adults can help children start early in life. Savings-related materials to use with elementary-age youngsters include Financial Fables from the Fed, which is a personal finance ebook series that includes family activities, and question-and-answer guides and lessons for popular children's literature, including Curious George Saves His Pennies, Bunny Money, and Just Saving My Money. All of these books related to savings would be perfect to cap off America Saves Week with the March 2 Read across America Day—Dr. Seuss's birthday.