Saving isn’t exactly the most fun thing you can do with your money. Sure, “saving” a little cash by using a coupon is exciting, but tucking money away for emergencies doesn’t sound as good as taking a vacation or buying a new TV.
Many Americans would agree with that statement, based on a recent Bankrate survey that showed about 60% didn’t have enough emergency savings to afford a $1,000 expense. According to that same survey, about 40% of Americans would choose to borrow at least some money to cover a sudden expense of any amount. That data was gathered before the COVID-19 pandemic, which put even more financial stress on households around the world.
There’s never a bad time to start saving. Here are seven strategies you can use to gradually build your savings and improve your financial health.
- Cut unnecessary spending. It’s easier said than done, but limiting your financial splurges is one of the most effective strategies for saving more money. Postpone that vacation, go simple at the salon, watch movies at home, and pause any subscriptions you don’t need. In a matter of a few months, you’ll notice a significant change in the surplus you have from your paychecks.
- Deposit money in a credit union. Put the extra money you save from unnecessary spending into a savings account at a credit union. These accounts can earn interest that will allow your money to grow. Pay attention to the interest terms, including the rate at which it grows and how often you’ll receive interest per year.
- Add to your retirement plan. Take advantage of employer match options on your 401(k), or invest in the stock market to allow your money to work for you while you’re not on the clock.
- Commit to a monthly deposit. It doesn’t have to be a large commitment, either. Start with something like $25, and you might notice that you’re encouraged to increase that amount later. You can also try calculating how much money you can afford to spend per day before your next payday, and if you don’t spend that amount, put the extra into your savings.
- Enlist someone to keep you accountable. Tell your spouse, significant other, or best friend about your savings goals. This will help you stick to your goals because you know that someone else is watching. You can even work on your goals together to motivate each other.
- Attack your debt to minimize your bills. Credit cards are convenient tools for paying for emergencies or significant purchases, but they also cost you extra money if you carry a balance from month to month. Not only are you required to make a minimum payment each month on your card, but you’re also accruing interest (the bad kind) every time you don’t pay the balance in full. That’s extra money you could be saving!
- Use generic brands, look for coupons, and buy in bulk when it’s practical. The money you save from each generic item you buy is valuable in the long run. If you have a larger family or are buying a non-perishable product, buy it in bulk so you can save some money on the overall cost. Shopping smart also means looking for help. Newspapers, mailers, and online codes are your best friend when you’re trying to reduce your spending.
As you become more experienced at saving money, you can start including it in your monthly budget. Ideally, you won’t feel like you’re sacrificing anything because you’ve already accounted for it on your personal ledger. If you do feel like saving money is taking away from enjoying life in the present, try to remember that even a little deposit is better than nothing, and focus on the rewarding feeling that will come from withdrawing your savings for a large vacation or relaxing retirement.
