4 Ways to Boost Your Savings Account Each Day
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It’s no secret that many people don’t save money. According to a Bankrate survey, more than 60 percent of Americans don’t have enough money in their savings account to cover a $1,000 unexpected expense. This is not surprising and the reason why people don’t make saving a priority is anyone’s guess.
If I had to make an educated assumption though, I would say people don’t save because they don’t understand the full concept of saving money. Earlier this year, I was talking to a friend who got upset because she received a tax refund and planned to set some of it into a savings account but an unexpected expense popped up that ended up cleaning out her account instead.
I remember her saying to me, “It really sucks because it feels like I can never get ahead. Every time I try to save some money, something comes up and I have to spend it.”
In that moment, I revealed to her that she was all wrong about her saving strategy. Saving money is not all about throwing a huge lump sum amount like your tax refund into your savings account when it’s convenient for you. Sure, that will help, but it’s not the bottom line.
Saving and building a successful emergency fund requires you to be committed to working toward your goal each day.
Emergencies and unexpected expenses don’t happen each and every day (unless you’re very unlucky). Therefore, if you commit to saving some money each day (no matter how small), it will add up over time and provide you with a solid financial cushion as opposed to relying on one-time savings contributions.
Since setting aside a little money to save as often as you can is one of the best savings strategies, here are a few actionable ways to help you save more money each day.
1. Put the Difference From Discounts Into Savings
If you prefer to only shop when things are on sale like I do, you can choose to save the amount of money you are being discounted. For example. If you go to Walgreens to purchase an item that is $10 but it is on sale and you save $2, you can literally put $2 in your savings account instead of simply taking delight in the idea that you scored a discount.
Some stores like Walmart and Kohl’s will even let you know how much money you saved at the bottom of the receipt so it will be easier to track.
Retailers are tricky with their advertising but if they are offering a sale or discount on certain items, consumers are not really saving any money in the long run if they just spend the savings they generated the next day on something else anyway.
To make sure you are optimizing the deals you take advantage of, transfer the savings you generate to your actual savings account shortly after you make a purchase.
2. Save the Spare Change You Find Each Week
What do you do with your spare change? When I was growing up, my parents used to put all our spare change into this huge 5-gallon water jug and whenever it was full they took it to the store to trade it in for cash.
Now, we use spare change for laundry supplies in my household but I still see change all over the house and in my car each month. If your budget already seems pretty tight but you still want to save more, try collecting spare change around your house regularly and sock it away so you can deposit it into your savings account every month.
When you go out to order food or make a cash purchase, take the change you receive and put it to good use in a high-yield savings account, like Ally or Barclays Savings, to earn some interest as they both pay at least 1.15%. Even if it’s only $5-$10 per month, it adds up and will be more than what you had originally.
3. Save the Difference From a Regular Expense
Pretend that you had to live on a bare bones budget. Think about how many variable expenses you could cut down on in order to stash away the savings you generate from lowering each expense.
If you’re not sure where or how to start with this, a free tool like Personal Capital can help you track expenses and identify opportunities for trimming, which you can turn into extra savings contributions.
For example, I try to allow myself a fuel budget of $150 per month and I think that is a little generous depending on how much I drive. If I really focused on my spending in this area and tried to minimize it, I could probably cut my fuel budget down to $100 or less which would average out to an additional savings of $2 per day or $12.50+ per week.
If I actually end up spending less money on fuel for my car week after week, instead of letting the extra savings sit in my checking account or get spent on something else, I could use it to boost my savings account.
You can use this strategy with many other expenses you have that you feel you could cut back on like your daily coffee, work lunches and your cell phone bill. In reality, there are a lot of ways to save money every month – take the savings and stick it right in your savings account.
4. automate your savings
Automating your savings is the best way to boost your savings account! Also known as paying yourself first, automating your savings is like paying a bill to yourself.
If you’re like me, life gets busy. You plan and want to save but other things get in the way. The result? You end up putting money in your savings account every few months and don’t build a safety cushion for yourself.
When you make your saving automatic you kill that forgetful streak. Regardless if you’re on vacation, at work or sleeping you are saving money.
Most banks today let you set up an automatic transfer with little effort and you can do it at whatever level or frequency you want.
Just make sure to pick a bank that has no minimum balance requirement and pays a decent amount of interest. Synchrony Bank, for example, allows you to open an account of any balance and pays at least 1.20% on your savings so it can grow over time.
A Little Can Go A Long Way When You Stay Consistent
The bottom line is that saving is progressive and takes time. You need to stick with it and remember that every little bit counts.
If you’re motivated by the process itself and like to set goals, you can try a taking a more active approach to save each day. If you prefer to automate everything, you can stick to setting up automatic transfers to your savings account. Either way, it’s important to make sure that extra or leftover money actually makes it into your savings account regularly.
Do you think you could be saving more than you are currently? Have you ever used any of these savings strategies? What are some other tips you have to regularly increase your savings?
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