Are you a saver or a spender? Or maybe a little bit of both?
No matter where you find yourself on the spectrum, the fact of the matter is, over half of Americans have less than $1,000 in savings.1 At the same time, many financial professionals recommend that most people should have three to six months of savings in an emergency fund.2
Creating healthy savings is difficult, especially if you’re building from the ground up. You may have a lofty goal set for your savings account, but it’s important to know that slow and steady usually wins the race.
The best way to build up savings is through healthy habits that you can incorporate into your everyday life. Adopting healthy saving habits will help you steadily grow your money over time—without burning yourself out.
Check out these 7 habits to help you boost your savings.
Put transfers on autopilot
One of the easiest, most effective ways to increase your savings is to schedule automatic transfers into your savings account. There are two simple ways to do this:
Via direct deposit
Most direct deposit programs allow you to split your direct deposit in several ways. This allows you to automatically place part of your paycheck in checking and part of your paycheck in savings. This way, every pay period, you keep the money you need to live on while saving the rest. Talk to your human resources or payroll contact to learn more.
Through online banking
Most online banking programs allow you to set up automatic weekly, biweekly or monthly transfers between accounts. Consider this: If you transfer $30 a week into savings, you’ll save $1,560 in a year!
2. Stash away extra cash
When you find yourself with some extra money—whether it’s thanks to a bonus, side gig, tax refund or windfall—go ahead and put a big chunk of the amount in your savings account. What should you do with the rest? Use it in a way that’s enjoyable for you! Saving is important—but so is enjoying the present.
Make the most of spare change
Your spare change isn’t worth anything jangling around in your pocket. Each day, toss your spare coins into a jar. Once it’s full, take it to the bank and deposit it into your savings account. Check with your bank to see if the change needs to be rolled or loose. You may be pleased when you discover how much you can boost your savings simply through spare change!
Cut and stash.
Are there any ways you can cut spending? Maybe it’s eliminating fast food, or canceling subscription streaming services you don’t use as frequently. However much you’re able to cut back—whether it’s $20 a week or $10 a month—go ahead and deposit that amount into savings. You were already spending that money, so you shouldn’t miss it!
Try the no-spend challenge
The no-spend challenge is a great way to halt patterns of overspending while boosting your savings and helping you appreciate what you have. The way it works is you commit to cutting spending in one specific area for a certain amount of time. For example, you may commit to cutting out buying new shoes for a year. Transfer the money you have saved during your no-spend challenge directly into savings. For example, if you usually spend $300 a year on shoes, but cut that out for a year, transfer the $300 you saved into savings.
Replace impulse buys with impulse saves
Do you fall victim to impulse buys? It happens to the best of us! When you feel an impulse buy coming on, stop yourself from jumping on it. Instead, wait 24 hours to make the purchase. If you don’t feel as strongly about the purchase 24 hours later, don’t buy it. Instead, put the money you would have spent into your savings account
Talk to a financial representative
When it comes to building savings, it can pay to have an expert on your side. Our investment professionals and wealth management solutions can help you reach your goals and improve upon your financial security. We offer a variety of investment options, whether your goal is retirement, buying a new home or saving for your grandchild’s education. Learn more here.
1Yahoo! finance, 58% of Americans have less than $1,000 in savings, survey finds, https://finance.yahoo.com/news/58-americans-less-1-000-090000503.html, May 15, 2019.
2Dave Ramsey, A Quick Guide to Your Emergency Fund, https://www.daveramsey.com/blog/quick-guide-to-your-emergency-fund, 2020.