A savings account is a great place to store your money and earn a little interest, although they are a bit less accessible than a Checking Account (What is a Checking Account?)

As opposed to a checking account, when you store your money at a bank using a Savings Account, your money is not directly accessible (though it can be with a simple visit to the bank). By storing your money with the bank, you can be sure that your money is safe and secure.

The money is even further secured against bank failure by the FDIC (What is the FDIC?) as well.

Will I Earn Interest with a Savings Account?

You absolutely should. If you’re opening a Savings Account that pays zero interest, you should look into another bank. However, if you’re looking for any sizable interest a savings account is likely not the answer for you. The interest that you will receive will be very, very small. Often under 1% annually. But, minuscule interest is better than none at all.

Savings Account as Overdraft Protection

Many banks offer a great service called overdraft protection. Learn what Overdraft Protection is.

I had a friend come pick me up to get coffee this morning.

Living near a university, there are coffee shops nearly everywhere—but we knew we’d either be going to Caribou Coffee or Starbucks.

Caribou Coffee was about 10 miles north, Starbucks was about a mile south.

Why were we even considering Caribou? Because my friend David had a gift card.

Which made me ask the question…

How far out of your way do you go to use a gift card?

Ten miles?

We didn’t. My friend even took the time to say, “I know that using the gift card is the financially smart decision…”

We ended up at Starbucks.

We couldn’t make ourselves drive ten miles just to save a few dollars. The time and the gasoline made the idea of a Starbucks a mile away much more appealing.

Gift cards may be free money; but they’re not nearly as valuable and are almost always completely illiquid.

I used to get Best Buy gift certificates for my birthday every year. I hated that. It meant I had to drive 5 exits down the interstate, deal with traffic in the busiest part of town (the area is a nightmare), fight the lines in Best Buy, and buy something I never would have bought or wanted had I not had a Best Buy Gift Card.

Why was I stuck buying things I didn’t want in stores I didn’t shop at?

People Think They Can Spend Your Money Better Than You Can

Just look around. It started with the Government, now its your friends. Are they trying to upset or control you?

Probably not—if they are, get a new friend. They probably just feel strange giving you cash instead of a present. For some reason, if they give you a card they feel like they’ve personalized the gift.

It probably seemed that way for the other thousands of people who bought that identical gift card as well.

Money is plenty personal for me!

There are however, those occasional people that truly did buy you a gift card because they wanted to make sure you spent it in that store. These people drive me insane.

Gift Cards are the Gifts of Tyrants.

Sadly—I’m not talking to those people. There’s no talking sense into those people. But to all of you who are simply trying to personalize your gift:

Money is a great gift for most people. It always comes in the right size, color and everything else! Perfectly customizable and easily exchanged.

Don’t Overthink Gifts! Give Cash!

Why are gift cards worse than money? Loads of reasons! Here are a few:

1. Gift cards limit you to just one store.
2. It’s never the right amount.
   Whether the item you choose to get is less than or more than your gift card, you’ve been screwed.
   Either you end up with money that your gift giver paid on your card that you never use
   Or you have to spend extra money in the store that you wouldn’t have spent to make up the difference.
3. Gift Certificates have Expiration Dates
   I promise your money won’t have an expiration date. Well, actually, at the rate the Government’s going now… nevermind. A post for another day.
4. Gift Certificates force someone to go to a Store
   Giving someone money allows them to hang on to it, invest it, save it or anything else. A gift certificate is like saying, “Here. I didn’t want to get anything so you get up and do it.”
5. Gift Certificates have no Earning Potential
   I can invest a $20 bill and make an average of $2.48 a year according to the last 80 years of market history. My $20 gift certificate will be worth exactly the same a year from now though.

Please—for the sake of your friends and for me. If we all start giving cash instead, we may start the pattern and end the horrid reign of gift cards. Let’s make cash an acceptable gift again.

If you have a story about gifts in the form of cash or giftcards, let us know! Drop a comment below, or reach us on Twitter.

1. Clean up your Budgets!

This is the equivalent of a company cleaning up its balance sheets. Anytime any one (the government, investors, lenders) wants to see the true quality of a company, they go to the balance sheet.

This applies in personal finance as well. By making sure your debt and equity are in Balance, you can keep yourself solid for the hard times.

Start this process by eliminating debt. Dave Ramsey advises the Debt Snowball method that you can read more about in his book, Total Money Makeover. Think of it this way: If you were entering into this recession with no expenses except your basic utilities, wouldn’t you be seeing it in a different light? That’s why its important.

2. Build up your Savings

Now consider approaching this recession with no expenses but utilities, and enough money in the bank to cover all of your expenses for the next year. You would definitely be approaching this recession differently.

Most Financial analysts advise you to save 10% of your income; As a college student, you may want to save a little more. I’m saving 30% right now, and I’d love to be able to put away more.

3. Get a Job and Keep it

Don’t have a job? Make sure that if recession seems on the horizon, Get one.

Have a job? Excellent!

Keep it.

That’s very simple, but there’s a more important step here.
The “Keep it” part isn’t always so easy. Especially in a downsizing, recession atmosphere.

So make yourself necessary. When your company realizes it needs to cut costs-employees will be quick to be downsized. By making sure that you are important to the company, you lower your chances of being one of those downsizes immensely.

If you’re not working on an important project right now, get signed up for one.

If you can’t get signed up on one, volunteer.

What’s an important project? When a company looks to downsize; they look at people as profit generators or expenses. Be sure that you are signing on to something that makes you a profit generator.

4. Invest through the bad

The whole mentality of the stock market: Buy Low, Sell High.

So I never understood people’s mentality when we dip into a recession and no one buys?

When you know its a low in the market, why wouldn’t you buy?! Make sure, that no matter how ugly everything’s looking, that you find the solid companies out there and continue your regular investing. By doing so, you’re going to virtually guarantee a sizable return at the the following boom.

Recessions, though difficult, can be an outstanding tool if used correctly.

They aren’t fun for the majority of people; but its a Dog-eat-Dog world, and in Capitalism, someone will come out on top. Take the steps to be sure that its you.

How are you Surviving the Recession?

What steps are you taking to recession proof your finances? Do you practice anything that makes you more secure in times such as these where things aren’t looking so hot?

What are you doing now that you can carry over into the good times to improve your personal finances?

1. Wordle.net

According to their website, “Wordle is a toy for generating “word clouds” from text that you provide.”
With wordle, you can either type a bunch of words in a field that the website will work with or type in a website URL and the site will automatically take the main words from that page.

For UseTheDollar.com- Wordle yielded this:

or

Wordle.net makes this sort of project so mind-numbingly simple, its incredible.

Print it out, Throw one of these into a cheap or self made frame, and voila! Gift ready!

2. Bake Cookies

I’ll tell you what- I don’t think you could make me a whole lot happier than to hand me a batch of fresh snickerdoodles. I’m a sucker for those things.

Throw some shredded paper in the bottom, bake a few different types of cookies, and put them in a basket and you’ve got a killer gift for any friend or family member!

3. Coupon Book

Make your own coupon book. These can be filled with things like “one free backrub”, “5 rooms vacuumed”, etc.

If you really want to make a killer one, mix it with your own home made coupons and coupons for different stores, restaurants and anything else that the receiver might be interested in.