It’s safe to say that having some money stowed away in savings is always a good idea.1 It can give you a sense of security in knowing you’ll have extra funds to cover expenses in the event of things such as unemployment, emergencies, or unexpected expenses. However, saving money isn’t always so simple and there are many reasons someone may struggle to build up their savings. Here are some tips you can use to help make saving money a little easier.
A common tactic many use to save money is to transfer any funds they have left over at the end of their check right before they get paid again. This often seems like a good idea as it ensures you have full access to all your funds in case you need them before committing to putting any of them away. The problem with this is that when the funds are readily available, they’re more likely to be spent leading to less money going to savings. A good way to ensure you have money going into savings is to set up an automatic deposit2 into your savings account. Many employers allow you to set up multiple accounts for direct deposit and you can either specify a percentage of your pay you’d like to go into each account or specify a set dollar amount. If you’re unsure of how much you can commit to savings, try starting small with maybe $5-$10. Though progress might be slow, it’s still progress and a step in the right direction.
Another easy way to build up your savings is with the round up method. With this method of saving money, every time you make a purchase you would round up to the nearest dollar and put the difference in savings. For example, if you buy a sandwich for $3.25 you would round up to $4 and put $0.75 in your savings account. This small amount might seem insignificant, but we’re constantly making purchases everyday and these small investments to your savings can add up to something big. One way you could do this is manually. You could sit down at the end of every night, or even once a week, add up all your purchases, and then make a transfer to your savings account. Another option, which might be easier, would be to enlist the help of your bank, as some banks offer a feature that will automatically round up your purchases and transfer the difference to savings for you. If your bank doesn’t offer this option, Forbes has an article listing some great online banking institutions3 that help with automated savings.
A lot of people use a debit or credit card when making purchases, but this keeps your funds, and your spending, out of sight. And as the saying goes, out of sight, out of mind. When spending money, it can be easy to spend more than you think you are, or more than you intend to. A great way to save money is to start using cash when doing your shopping4. This way you will be able to see the money you’re spending as you spend it, and it may cause you to pause and think twice before buying something. You could also take this a step further and build your savings by saving your change. Anytime you spend your cash, put back any change you receive into your savings. It might also be a good idea to keep this cash in a piggy bank at home, as it could encourage you to save more as you see your money build.
1Siroto, Janet. (2023, Mar 23). Retrieved from: https://www.sofi.com/learn/content/why-saving-money-is-important/
2Vohwinkle, Jeremy. (2021, Nov 11). Retrieved from: https://www.thebalancemoney.com/how-to-create-an-automatic-savings-plan-1289900
3Horton, Cassidy. (2023, Apr 5). Retrieved from: https://www.forbes.com/advisor/banking/savings/the-5-best-round-up-apps-for-saving-money/
4Trantham, Holly. (2018, Aug 22). Retrieved from: https://www.nbcnews.com/better/pop-culture/how-save-money-cash-only-budgeting-system-ncna902516