<div class="block">Savings are essential for unexpected emergencies, goals like buying a home or car and even the occasional shopping splurge. Gary Zimmerman, founder at MaxMyInterest, joined &#39;Stretching Your Dollar&#39; to talk about building up a cash stash. He said the most important thing is to begin saving today, particularly for those 20 and 30 something year-olds who will need retirement savings. </div>

Stretching Your Dollar

Stretching Your Dollar: Expert Tips on Savings

But first we're starting the show with my favorite part where we speak to our viewers directly about a topic that we're covering on this show. So today we asked, are you happy with your savings? Out of 1000 votes? 16% said yes, 72% said no, I need to save more and 12% voted. I'm getting there. Well, for those of you hoping to save more, we are here to help. Of course, savings is an important topic when it comes to stretching your dollar and it's important to have the nest egg to help you pay for an emergency or make a big purchase like a home or a car or if you just want to dip into that savings to splurge on a nice vacation. So here to help us figure out the best ways to save is Gary Zimmerman, the founder of cash management platform, Max my interest. Uh Gary, it's great to have you. Thank you for having me, Kristen. It's nice to be back. Americans are sitting on a lot of cash these days. Trillions of dollars in cash. What do people need to know about their savings? Well, first of all. I think it's important to recognize that, uh, the best time to start saving is today it's right away because money compounds over time. Right. And so a lot of people say, well, I don't really need to worry about saving until retirement by then. It's really too late. Right. It's in your twenties and thirties that it's most important to begin saving. What's the best way to get started? Uh, I think the best way to get started is to really think about yourself, you know, yourself better than anyone else. You know, your sources of income, you understand your expenditures, but you also know what you're saving for, right? Some people are saving to purchase their first home. Some people are saving up for a vacation. Um, some people are trying to build the emergency funds so that they won't get into trouble if the unexpected happens. And then once you understand what you're saving for, then you can put forth your own plan for how to be disciplined about making sure that you're setting aside enough money to reach your goals. Where is the best place to put your savings these days? Well, this is a great question because numerous comparison websites exist to sort of help you shop for the best rates. But the reality is that there's no one best bank for you because banking is ultimately a market of supply and demand, right? And sometimes banks need more deposits and sometimes they need less. And so they're constantly changing their rates. What you need to do as a as a saver is constantly shop for the best rate. So it's not good enough to pick one bank. You need to be on the lookout all the time. And how does your platform come in and assist people with that getting the best rate on their savings? So max my interest was designed to make it really easy for, to save and to save really effectively. So the first thing we do is we help people open high yield savings accounts in under two minutes. We think we've built the fastest, most efficient way to open up new high yield savings accounts. But then what happens after that is really where the magic happens. What we do is we monitor interest rates every day and whenever we see a bank that's offering a higher rate, we help you move your money to whichever bank is willing to pay you the most for your money. And in doing so we can make sure that you're always earning the highest rates available. And in fact, we've done back testing analysis over the last 10 years and we found that our platform has always delivered not only the best rates in the market but better than the best rates in the market. Interesting. So what's the average rate that someone could expect on their savings if they use your platform right now? Well, the National Savings average is 0.45%. So less than half of 1% most online banks today are advertising rates in the 4% range. The top rate on our platform is 5.36%. Wow. And that's just at one single bank or that's the average. Um that's actually several of the banks on our platform are offering that high rate. What's happened over the years is that banks realize that by using Macs, they could avoid having to spend money on customer acquisition. And that takes a lot of cost out of the system. And so they can afford to pay our customers higher rates than they otherwise offer to the general public. Obviously, it's important to save for retirement, but other things come up, emergencies, buying a home, having a kid sending that child to college, right? Other big ticket items, what should your savings this money uh that you help your customers manage really be used for? Um Well, look, you only get to live your life once, right? So the savings should be used for what's most important to you. Um And those life events happen, whether you're ready for them or not, right? Your kid is getting ready to go to school or college or you want to buy your first home. So I think, you know, the more you can save the earlier you can start saving the better. So in terms of what you have in a savings account let's say you do want to make a big ticket purchase. Is it better to put that on a credit card or to actually dip into your savings? Well, typically a credit card is the most expensive source of financing for anyone. So really, you should only use your credit card for things that you're going to pay off that same month. You should try to avoid carrying any balance in your credit card. Interest rates on credit cards are north of 25% today. So that's very, very expensive money in general. The things that make sense to borrow for things like a home, anything you think might appreciate in value over time, it makes sense to borrow for that. But things that are going to lose value over time like, um, you know, clothing or a car, it's better to save for those in advance. Interesting. Ok, good to know. Now, of course, it is a very rate friendly environment right now for savers on those high yield savings account because rates are at a more than 20 plus year high with the fed hiking them in order to try to cool inflation. But we know that these rates are variable and you kind of made a nod to that earlier, right? And so what should a viewer know when it comes to changing rates that at some point rates might go back down? And at that point, should they reconsider how they're saving money? Well, we think it's always important to saving. But really saving is a gateway to investing and the best long term returns have historically come from investing, not from saving. So we think of saving as a first step in your longer journey towards investing, interest rates are higher now than they've been for the last 10 years or even 20 years. But they're not actually high by historical standards. So interestingly, we're maybe slightly above average in terms of rates. It's just that people got used to the zero rate environment, which was actually very unusual. Well, a tax season is approaching. So anyone who's earning money on their high yield savings account, will they need to pay taxes on that? They will and look, taxes are your civic duty, right? We all need to pay tax. That's how our society functions. My first accounting professor when I first started at Merrill Lynch told me something and he said it's better to be in a tax paying position, right? No one likes to pay tax, but you're better off owing tax than not earning any income and not owing tax at all. And so if someone wants to take advantage of your platform and try to save more money, do they need to invest with a minimum amount of cash? So, max my interest, which is Max my dot com doesn't have any minimum balance requirement so anyone can get started right away. Any other tips. Um I, you know, I think the main thing is just uh know yourself and don't think of this as a one time decision, um rates will change over time, your priorities will change over time. Um Various investments will become more or less attractive over time. So, uh you know, stay focused. All right, Gary Zimmerman with the expert tips, Gary, thank you so much. Thank you for having me Kristen.