3 tips for saving money easily

These pointers for saving can help you make building wealth a part of your regular routine.

Tags: Budgeting, Goals, Home, Savings
Published: August 08, 2018

Savings is a vital part of being financially healthy. Yet most Americans don’t save enough. According to a 2017 survey by GOBankingRates, 57 percent of Americans have less than $1,000 in their savings accounts, and 39 percent have no savings at all.

Here we detail tips for saving so you can protect yourself from financial emergencies, plan for the future or make big purchases. If you make savings a habit, the process won’t feel like a sacrifice. Here’s how.

1. Open a savings account

Your first step should be to open a savings account. Opening a savings account can go a long way toward reaching your goals. You don’t want your savings in the checking account you regularly use, or held as cash, tempting you to spend. Accounts differ by financial institution, so it pays to shop around. Look for savings accounts that allow easy and penalty-free access to your money.

2. Set savings goals

Researchers have found that an effective way to save is to start with an end goal in mind. Write down your goals. Keep them in your wallet so that you see them whenever you might spend on impulse. And imagine in detail the feeling of accomplishment you’ll have when reaching your savings goal.

Here are three common savings goals to consider:

  • Savings to spend — Whether it’s a down payment on a new home, an automobile, vacation or holidays, saving to spend is rewarding. Use this savings calculator to determine how long it will take you to reach your savings goals.
  • Emergency savings — Financial advisors recommend saving at least six to 12 months of income in case of an emergency. Once you reach this goal, you will have earned the peace of mind that you can survive the setback of a job loss, family tragedy or economic downturn.
  • Opportunity savings — The last economic downturn presented buying opportunities for discounted homes, cars and other assets. Putting money aside for investments or purchasing opportunities will help you get the best bang for your buck in the future.

3. Save first, spend second

Research has shown that people who set up direct deposit into savings accounts tend to save more over time. This highly effective method is easy to do.

  •  Set up your direct deposit to send a portion of your paycheck to a savings account immediately, before you even miss the money.
  • Pay yourself first by adding more to your savings account when you receive out-of-the-ordinary income such as pay increases, bonuses or tax refunds.
  • Remember to leave enough for everyday spending. That way you won’t be dipping into your savings for day-to-day needs, which can feel frustrating and counterproductive to your goals.

There’s more to learn, so continue reading about your savings options.