[Smart Savings Life②] To Travel This Year-End... Create a Purpose Savings Account

[Asia Economy Reporter Kim Min-young] Money is truly hard to save. There are many things you want to buy, and spending is easy. When you become a beginner in society and start receiving a fixed monthly salary, the desire to save money naturally arises. On the other hand, there is even a sense of duty to save money in order to gather seed money before starting investments.

However, even if you sign up for a one-year installment savings account, you often feel the urge to cancel it halfway through. This is a natural phenomenon. According to the Financial Supervisory Service, the early termination rate of deposits and installment savings at domestic banks in 2016 reached 35.7%. This means that more than one in three people withdrew money from their savings accounts to use elsewhere.

In March, the total amount of (individual) deposit and installment savings cancellations at the five major commercial banks?Shinhan, KB Kookmin, Hana, Woori, and NH Nonghyup?recorded 7.7389 trillion KRW. This increased by more than 2 trillion KRW in just one month from about 5.7 trillion KRW in February. While the economic difficulties caused by the COVID-19 pandemic may have contributed, it is also estimated that many individuals broke their deposits and savings to invest in stocks and other ventures.

During the saving period, numerous temptations arise. To enjoy the joy of maturity and practice wise saving habits, following the suggestions below might be helpful.

First, it is better to save small amounts for short periods. Nowadays, some installment savings allow a minimum deposit of as little as 1,000 KRW. Setting the deposit amount between 10,000 and 100,000 KRW and subscribing to 3- or 6-month plans to see them through to maturity is recommended. After experiencing maturity once or twice, subscribing to 1- or 2-year installment savings will feel much easier to maintain.

Recently, many people subscribe to installment savings through smartphone applications, but since signing up is easy, cancellations are also simple, which often leads to not reaching maturity.

Creating purpose-specific savings is also good. Although banks do not sell purpose-specific savings separately, you can set a personal goal for why you are saving this money. For example, saving for travel, plastic surgery, beauty, shopping, or family events.

For customers saving for travel, banks like Woori Bank and Sh Suhyup Bank offer financial products under the name “Travel Savings.”

Due to COVID-19, traveling abroad as well as domestically is difficult. How about starting to save money now for a trip you will take after the pandemic is completely over?

Whether it is a deposit or installment savings, signing up for a long period allows you to accumulate a lump sum. Let go of the greed to save a large amount at once, and start by subscribing to installment savings with small amounts for short periods to experience the joy of maturity.

This content was produced with the assistance of AI translation services.