What I Wish I'd Known About Finance: Account Types

At some point in my elementary school career, my mom took me to our small town's local bank and helped me open a savings account.  I had earned money off and on through my earlier years helping her out with her home-based wedding cake business, and it was time to move from keeping loose change and dollar bills in the piggy bank to depositing that money into a real bank.  It was a pretty neat experience.  I got the little brown book with my life's savings totaled in it, and every so often I would bring in a bit more to add to that total.  I kept at it, saving some here, taking a bit out here and there for some things until I closed the account when I got married.

The thing I wished I had known then?  That there were more options out there for my money than a plain ol' savings account.  In retrospect, I didn't start out with much in the account (though at the time, it seemed like a really big sum), and by the time I closed it, there really wasn't much growth to show for keeping money in the account all those years.  The account did earn some interest, but nothing that would fund a college career; at best, the interest I earned might have bought a few pages from a book required for a college class.  It would have been helpful to know at some point along the way that there might have been a place for my money that would've yielded better results.

Don't get me wrong.  I am very thankful my parents taught me about savings and took the time to help me set up an account.  They encouraged saving what I could and how to make wise purchase decisions with the money I did have.  The way they went about it made it feel natural, right and good to save; it wasn't a huge sacrifice, just something that needed to be done.  If I hadn't had that type of guidance, who knows if I would've ever had the initiative to start any kind of bank account on my own. 

Do I blame my parents for not sitting me down at the age of 9 and presenting me with sheets on bonds, CDs, IRAs, etc.?  Not at all!  I got the basics from them, and for many years, this is all that seemed necessary.  Earn income, spend what you need on necessities and a little fun, save the rest. 

It wasn't until after I married and was in my second job out of college that I heard anything about retirement accounts and considered doing more with money than just spending and saving.  At this time, my husband and I had a joint savings account, still of the "plain ol'" variety, and after I finished college and started bringing in some serious income, we happily put money into that account.  It was safe, untouched and there for a rainy day emergency.  I probably don't have to tell you that it earned us next-to-nothing in interest.  At some point during my employment, my employer had an open enrollment for their 403b plan.  It sounded good, so I signed up and started putting a bit of my paycheck into this account which my employer matched.  Not too long after, I found out I was expecting twins, and I left my professional job for the job of stay at home mom, and that was the end of automatic contributions to the account by myself and my employer.

The moral of this financial tale?  I just wish I had taken some kind of initiative in my earlier years to dig into options other than a savings account.  It feels like I've somehow let a lot of years of potential interest earnings slip by, with not a lot to show for it except some money in an account.  Is it important to save?  I believe it is, yes.  Is it important to be educated about what options are best for you and your personal situation when it comes to saving money?  At one time, I might have said no, but today, I say yes.  While my husband and I remain on a path that will hopefully take us to that wonderful nation of Debt Free, we are also now taking some detours that will help us best manage our money for our future.

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