MARY LOUISE KELLY, HOST:
It is a spendy time of year. Between travel and gifts, maybe you're looking at your bank account, thinking about how you can be savvier about money in 2026. Life Kit host Marielle Segarra has some ideas to help. Here's a place to start from one financial expert - pick the right place to keep your money.
(SOUNDBITE OF ARCHIVED NPR CONTENT)
YANELY ESPINAL: I'm going to come in with my business hat on.
(SOUNDBITE OF MUSIC)
ESPINAL: Which means I'm thinking about negotiating. I'm thinking about how can I get the best deal in this partnership, in this business deal.
MARIELLE SEGARRA: Yanely Espinal is a financial educator. She works at a nonprofit called Next Gen Personal Finance.
ESPINAL: Credit Unions are notoriously, you know, known historically for giving better interest rates on loans. And the reason why is because you're not just a customer, just a client. Like, you are actually a member owner. So they're able to take the money that they would typically make in profit and actually divvy it up and give it back to their members by offering much lower interest rates for things like credit card loans or a car loan or a personal loan or even a mortgage loan. So if you are going to borrow money for any big-ticket item like that, and you're not a member of a credit union, it's a good idea to establish an account with a credit union a little before you know you're going to need to borrow money. And so that's going to give you the ability to go and get lower interest rate loans through a credit union rather than these big major banks.
SEGARRA: OK. So what's the advice when you're trying to make money on your money, when you're trying to earn interest?
ESPINAL: Using a high-yield savings account.
(SOUNDBITE OF MUSIC)
ESPINAL: Your cash is literally losing value every single year over year because inflation changes every year. Sometimes it's 4%. Sometimes it's 3%. Sometimes it's 7, 8%. And your cash sitting in that traditional savings account is barely making any interest at all. Rates are as low as, like, 0.01 at major banks, right? So we have to kind of go out and look, like, how can I put my money to work and make me the most money and grow me the most money while it's sitting in an account?
And right now, hands down, for any cash that you have, it's going to be a high-yield savings account. The banks that offer these accounts tend to be lesser-known banks, like online-only banks or mobile-only banks that are not as common as, like, the big, major banks that we see every time we go outside. But if you make sure that your bank account is FDIC insured or if you have a credit union savings account that your credit union is NCUA insured, there's no reason to think that there's something shady going on.
SEGARRA: And so this is one way to make money on your money is putting it in a high-yield savings account, but another way to make money on your money is to invest it.
ESPINAL: If I make $1 this year, I'm going to be taxed, right? I have to pay whatever tax percentage I owe on that dollar. But if I take that dollar and tuck it away into a 401(k) or another workplace retirement plan, it won't get taxed until I actually take it out at retirement in the future, and all the money that I do put into that account will be able to get used to purchase stock market investments. So that will actually grow your money. So by the time it's retirement time and you want to kick back, relax, enjoy the fruits of your labor, you actually have some fruits.
SEGARRA: And if you start making more money, that doesn't mean you have to spend it all. Maybe you don't need that bigger house or nicer car.
ESPINAL: The money that you just started making more, the excess money that you have disappears literally right away into thin air because it's going into new financial obligations that are not necessary. They're not needs. Let's be real. But we all kind of feel like we need it and want it. But you also deserve to have a dignified retirement. You have to really be in it for the long run. Like, I'm not doing this for me to be happy tomorrow. I'm doing this for me to be happy in many, many years from now.
(SOUNDBITE OF MUSIC)
KELLY: Life Kit has lots more tips for managing finances, and you can find them at npr.org/lifekit. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
