There are only four months left in 2023. And even though we’re fast approaching the end of the year, there’s still time to reassess your finances.
During the summer, we often spend more money on vacations, childcare and leisure. And any financial goals and intentions we set in January may be long forgotten by now. But Anna N’Jie-Konte, a certified financial planner, believes now is the perfect time to reset your financial trajectory -- particularly while savings rates are high.
Here’s how you can finish the year strong and how today’s high savings and CD rates can help you reach the finish line.
Savings and CD rates inch closer to 5%
Rates for savings and CDs are still high for many of the banks we track at CNET. If you’re regularly contributing money toward a goal, high-yield savings account rates average 4.90%, which can yield a good return on your savings.
Some HYSA rates are over 5.00%, including Newtek Bank, Bread Savings and TAB Bank. Just pay attention to any minimum deposit, balance or account requirements that can impact your interest earnings. High-yield savings account rates have continued to climb weekly for the past several months, so leaving your savings in this flexible fund could help you earn even more interest through the end of the year -- especially if rates keep rising.
CD rates are also high, but have not seen much overall movement in the past several weeks. remaining steady for many banks. The few banks raising rates are only doing so for select terms. For instance, this week, Rising Bank increased just its one- and two-year CD terms, while Synchrony increased only its five-year term. In general, right now short-term CD rates, like one-year terms, are offering the highest return for your money.
How to readjust your budget and saving
The end of summer is the perfect time to check in on your financial goals and look at what you're setting aside for savings. You'll want to run through your budget to make sure you know how much is going in and out of your bank account, then make adjustments that fit your priorities.
Look at this summer’s credit card and bank statements to better understand where your money is going. If you find you spent more than you anticipated or want to get more aggressive on your savings, see what expenses you may be able to cut or limit. For instance, if you spent more money on dining out than you realized, consider setting up a budget for dining out. You can also look for non-essential services or subscriptions that you may no longer use, like a rarely visited streaming app or gym membership.
N’Jie-Konte also recommends making sure you’re using the money you set aside for employee benefits, like a health savings account or flexible spending account. You may be able to save on healthcare expenses with these accounts, such as medicine or a new pair of glasses. If you're not able to take full advantage of these accounts, you may limit how much you deposit each month and divert that money to your savings instead.
Lastly, you can look to increase your income with a side hustle or part-time job, but N’Jie-Konte suggests cleaning out all the holes in your monthly finances first.
How savings rates can help you reach your financial goals
After you've figured out a plan to make saving more of a priority, make sure you're taking advantage of the current high interest rates savings accounts are offering.
High-yield savings accounts are offering APYs over 4%, and N’Jie-Konte recommends this type of flexible account over CDs right now. It's also a good place to store emergency savings and funds for other short-term goals since your money is easy to access. N’Jie-Konte also thinks savings rates could go even higher, so she recommends avoiding locking in a CD until rates stop climbing.
Saving what you can in a high-yielding account can inch you closer to your money goals as the end of the year approaches.
The bottom line
Bouncing back from summer spending can be tough, especially if you’ve spent more than expected or circumstances have changed.
Reevaluating your spending and goals can be both stressful and overwhelming. Especially with inflation pushing prices higher over the past few months, everyday expenses may be cutting into your financial plans. But it’s important to have a compassionate eye when you do, said N’Jie-Konte.
But start by taking a close look at your budget and set aside what you can. Plus, putting your money in the right account can yield some extra bucks while interest rates remain high. Every cent can add up.
