What does it mean to save?
When you save, you put something away for later. When you want to save money, it’s a good idea to put it in a savings account at a credit union. Why? Because when you save your money at a credit union, you can earn extra money—just for keeping your money there!
This extra money that you earn is called interest. Interest is a little bit of money that the credit union pays you for letting them hold onto your money and use it to help other credit union members. For example, they might loan some to another person—but when you need your money, you can always get it back.
Here’s an example:
You have $100 in your credit union savings account, and the credit union is paying you 10% interest every year.
How much is 10%? Let’s say you have a super huge pizza, and you cut it into 100 slices! If you take 10 slices of that pizza, you have taken 10% of the pizza.
That’s good to know about pizza, but how much is it when it comes to your money? To find out, multiply 10% by 100 and you get $10. You can write 10% as .10 for the math problem.
So your math problem looks like this: $100 x .10 = $10
The credit union will pay you $10 for keeping your $100 in your savings account for a year. At the end of the year, you will have $110 (your $100 + the $10 in interest from the credit union).
That’s a pretty good deal! There are two things you can do to earn more money in interest:
- Keep your money in the savings account – Don’t take it out unless you really need it!
- Put more money in the savings account – Every time you earn some money or get some money as a gift, put some of it in your savings account.
For some ideas about how to earn money, click here.