Looking to save more money? Discover practical ways to enhance your savings for retirement or your next vacation. With a few simple steps, you can boost your financial health and ease your money worries!
Maximize your checking account benefits. You likely rely heavily on your checking account, but fees can add up. The average monthly cost for a checking account at traditional banks is $5.31, according to a study from 2023. This amount doesn’t include possible out-of-network ATM or overdraft charges that some banks impose.
Many checking account fees can be avoided. If you’re incurring a monthly service charge, look into switching to a bank or credit union that offers free checking, such as an online bank. Keeping a minimum balance can also help you dodge these fees—just ask your bank about it! Ensure you select a bank with a convenient ATM network or one that reimburses ATM fees.
To prevent overdraft fees, keep track of your spending. “I always advise clients to balance their accounts,” says a Certified Financial Planner. If you haven’t balanced your account in a while, you don’t need to be exact—round your totals to the nearest dollar or five. Pretend you have $100 less than your actual balance. Also, consider opting out of overdraft protection.
Explore Savings Account Options
After years of low interest rates, savings accounts are finally offering better returns, especially from online banks and credit unions. If you’re earning under 4% interest, seeking out a new account could significantly increase your earnings. Additionally, consider a money market account for potentially higher rates.
Explore other types of interest-bearing accounts to find the right fit for you.
Automate Your Savings
Having a savings account is just the beginning; consistently contributing is key. One effective method is to set up direct deposit from your paycheck into two different accounts. Many employers offer “paycheck splitting,” allowing part of your paycheck to go directly into your checking account and another part into your savings account, ideally one that earns high interest.
Determine what percentage of your paycheck you wish to allocate to savings (after your retirement contributions) and automate the process. If your employer doesn’t permit multiple direct deposits, you can set up automatic transfers from your checking to savings account.
By moving funds to savings, you'll adjust to spending less and those funds can start earning interest. “Only keep what you need in your checking account,” advises a Certified Financial Planner.
Utilize Your Smartphone
Your smartphone can be a powerful tool for saving money. Your bank and credit card apps likely have features that help you track your spending and provide insights for reaching your financial goals.
There are also apps designed for savings and budgeting. For instance, Oportun monitors your spending and encourages daily savings without you noticing, while Qapital enables you to set up “savings rules,” rounding up your debit purchases to the nearest dollar and depositing the extra into savings automatically.
Make Saving Enjoyable!
One of the best aspects of budgeting is that it empowers you to spend on what truly matters. It’s not about restricting yourself; it’s about achieving financial freedom.
To stay motivated, find an image representing your savings goal—maybe a dream vacation or that stylish chair you want—and place it where you can see it daily. The next time you feel tempted to splurge, instead of spending, add a little extra to your online savings account. Check your savings at least once a month to celebrate your progress. You can do it!
