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A high-yield savings account is another type of savings account that usually pays a much higher rate of interest than a standard savings account. The tradeoff for earning more interest on your money is that high-yield accounts tend to require bigger initial deposits, larger minimum balances, and higher fees.

How do I create a budget?
Budgeting starts with tracking how much money you receive every month, minus how much money you spend every month. You can do this in an Excel sheet, on paper, or in a budgeting app—it’s up to you. However you track your budget, clearly lay out the following:

Income: List all sources of money that you receive in a month, with the dollar amount. This can include paychecks, investment income, alimony, settlements, and money that you make from side jobs or other projects, such as selling crafts.
Expenses: List every purchase that you make in a month, split into two categories: fixed expenses and discretionary spending. If you can’t remember where you’re spending money, review your bank statements, credit card statements, and brokerage account statements. Fixed expenses are the purchases that you must make every month. Their amounts don’t change (or change very little) and are considered essential. They include rent/mortgage payments, loan payments, and utilities. Discretionary spending is the category for nonessential or varying purchases for things like restaurant meals, shopping, clothes, and travel. Consider them wants rather than needs.
Savings: Record the amount of money that you’re able to save each month, whether it’s in cash, cash deposited into a bank account, or money that you add to an investment account or retirement account like an IRA or 401(k) if your employer offers one.

A checking account is also a deposit account at a bank or other financial institution that allows you to make deposits and withdrawals. Checking accounts are very liquid, meaning that they allow numerous withdrawals per month, as opposed to less liquid savings or investment accounts, though they earn little to no interest. Money can be deposited at banks and ATMs, through direct deposit, or through another type of electronic transfer. Account holders can withdraw funds via banks and ATMs, by writing checks, or using debit cards linked to their accounts.

A savings account is an interest-bearing deposit account held at a bank or other financial institution. Savings accounts typically pay a low interest rate, but their safety and reliability make them a sensible option for saving available cash for short-term needs. They usually have some legal limitations on how often you can withdraw money, but they’re generally very flexible, so they’re ideal for building an emergency fund, saving for a short-term goal like buying a car or going on vacation, or simply storing extra cash that you don’t need in your checking account.

Credit unions provide savings and checking accounts, issue loans, and offer other financial products, just like banks do. However, they are not-for-profit organizations owned by their members. Credit unions tend to have lower fees and better interest rates on savings accounts and loans. Credit unions are sometimes known for providing more personalized customer service, though they usually have far fewer branches and ATMs.

This is the most common type of bank at which people have accounts. Retail banks are for-profit companies that offer checking and savings accounts, loans, credit cards, and insurance. Retail banks can have physical, in-person buildings that you can visit or be online only. Most have both. Banks’ online technology tends to be advanced, and they often have more locations and ATMs nationwide than credit unions do.

Personal finance is where financial literacy translates into individual financial decision-making. How do you manage your money? Which savings and investment vehicles are you using? Personal finance is about making and meeting your financial goals—whether owning a home, helping other members of your family, saving for your children’s college education, supporting causes that you care about, planning for retirement, or anything else. Among other topics, it encompasses banking, budgeting, handling debt and credit, and investing. Let’s take a look at these basics to get you started.