How to Save More Money: Savings Tips and InsightsFinancial wellness relies in large part on making smart money decisions and building healthy financial habits. One of those habits — saving — can be pivotal to quality of life and peace of mind. Sufficient savings, after all, can help you navigate financial emergencies, buy the things you want and need, create amazing life experiences and confidently prepare for your future.
That’s why it never hurts to reassess how and how much you are saving and determine whether you might be able to incorporate a few new habits to save even more. Following are some easy ways to save money, along with insights to help supercharge your savings strategy.
Savings tips to get you started
Let’s start with some basic actions you can take to set yourself up for saving success:
Open and maintain a personal savings account
Keeping your savings in an account that’s separate from your checking account means you won’t be as tempted to spend those dollars on day-to-day purchases and expenses. Your money is also likely to earn more interest in a savings account to help your money grow faster. Consider linking your savings account to your personal checking account to make it easier to regularly transfer funds and build your savings.
Set savings goals
Any personal savings strategy should include immediate, short- and long-term goals. Goals can be a great motivator to help you keep your focus on building your saved funds. In fact, America Saves says that people who have a savings plan are twice as likely as others to save successfully.
- Immediate savings goal: Ensure you have six months of living expenses set aside in an emergency fund in case of unforeseen financial difficulties, such as a loss of income or unplanned expenses (e.g. home repairs or medical bills).
- Short-term savings goals: Short-term goals are generally focused on purchases you’d like to make within the next five years — e.g., a new car, boat or home — or perhaps you’d like to save for a vacation.
- Long-term savings goals: Think retirement and other future financial needs. If you have young children, their college education may be among your long-term savings goals.
Be intentional and methodical
When you make a habit of saving regularly — whether that’s every week, every month or every paycheck — you give yourself a better chance of reaching your savings goals.
Track and celebrate your savings
Another strong motivator to keep your savings efforts in high gear is watching your money grow. Take advantage of digital banking tools that enable you to see your savings balances anytime, anywhere.
How to save money each month
Next, here are some steps you can take to save more money each month:
Set up automatic transfers
Successful savers swear by the generations-old savings tip “Pay yourself first.” The idea is to stash away a certain amount of money from each paycheck before you even see it. Automatic transfers can make this process easy: Choose the amount you’d like to save each pay period (or at whatever frequency you choose) and set up an automatic transfer from your checking account to your savings account. Set it, forget it and watch your savings grow.
Scrutinize your housing expenses
Could your monthly mortgage or rent payment be lower? If you are a homeowner and haven’t taken advantage of the low mortgage interest rates of the past couple of years, you may want to look into whether refinancing your home could save you money. If you are a renter, explore whether extending your lease might earn you a discount. You may even want to consider downsizing your living space to free up more dollars each month for savings.
Consolidate any credit card debt
Paying credit card balances off every month is always best, but if you can’t, make sure you are paying the lowest possible interest rate on any outstanding balances. A home equity loan or personal loan may provide you with a lower interest rate to help you consolidate and pay down your debt.
Cut back on utilities
Protect the planet and lower your monthly expenses when you commit to unplugging unused appliances, adjusting the thermostat, installing energy-efficient lightbulbs and being more energy-conscious all around.
Cancel subscription services you can do without
In the case of subscription services, “set it and forget it” can work against your savings goals. It may be easy to sign up for streaming services, meal kit deliveries, gym memberships and other subscriptions, but remember that each of these triggers recurring charges that you have to pay. Take a good, hard look at your active subscriptions and ask yourself if they’re worth the monthly fee. If not, hit “Cancel” and start funneling those extra dollars into your savings account instead.
Make your own meals and coffee
According to the Bureau of Labor Statistics, the average American household spent nearly $2,400 on food away from home in 2020. You can cut down on your dining-out costs — avoiding restaurant markups, tips and delivery fees — by planning and prepping your meals at home with grocery-store ingredients.
This goes for one-time purchases as well as anything you buy on a regular basis: groceries, clothes, household supplies, etc. Why pay more than you could? Plan ahead, look for sales, make a shopping list and don’t give in to impulse buying.
Take advantage of your local library
Check with your library to see if they have that book you’ve been wanting to read (hard copy or electronic) before you spend cash buying it.
Easy ways to save money
These savings tips require more thought than effort, but can make a strong positive impact on your savings balances:
Pay your bills on time to avoid late fees
Money spent on late fees is money that could have gone into your savings account. Setting up automated bill payments through online banking can help you avoid late fees by ensuring your bills are paid on time, every time.
Save any raises, bonuses and tax refunds you get
If you look at raises, bonuses and other financial windfalls as extra money rather than spending money, your savings account will thank you.
Think about your own spending habits to come up with even more ideas for cutting costs and saving money. An open mind and thoughtful approach can help keep you on track to your savings goals.
If you need help figuring out a plan to maximize your savings, we’re here to help. Contact your local Dollar Bank office today.
This article is for general information purposes only and is not intended to provide legal, tax, accounting or financial advice. Any reliance on the information herein is solely and exclusively at your own risk and you are urged to do your own independent research. To the extent information herein references an outside resource or Internet site, Dollar Bank is not responsible for information, products or services obtained from outside sources and Dollar Bank will not be liable for any damages that may result from your access to outside resources. As always, please consult your own counsel, accountant, or other advisor regarding your specific situation.
Posted: February 18, 2022