For many people, saving more money is a top financial resolution. Whether you’re just starting out on your savings journey or you want to save more money this year, these tips can help you get started or build on your progress. From choosing the right savings account to reducing spending, keep reading for our best tips on how to save more money this year and every year.
Get An Understanding of Your Financial Situation
Before you can identify the best steps for you to take toward saving more, you have to start with an understanding of your current financial situation.
If you don’t already have a budget, list your monthly expenses and calculate how much money you have coming in and going out. Creating a budget can help you achieve your saving goals. When you track your spending, you can make more informed decisions about discretionary expenses. For example, you might want to reduce your spending on restaurants in order to contribute more to savings.
Ultimately, your savings contribution should be a line item in your budget. Figure out how much you can put in savings each month and then treat that amount like a bill you pay regularly.
Open A Savings Account
If you don’t already have a savings account, now is the time to get one. The primary benefit of having a savings account is the opportunity to earn interest on your extra funds. Savings accounts typically offer higher interest rates than checking accounts.
Maintaining a savings account can also help you avoid overspending. When your savings is kept physically separate from your checking account, it’s easier to avoid temptation to make an impulse purchase or spend more than you budgeted in a certain category.
While there are a variety of savings accounts available, if you’re just starting out consider a simple savings account.
Automate Your Savings
Set up automatic transfers from your checking account to your savings account so you will contribute to your savings on a recurring basis without having to remember. You can choose a frequency of transfers that work for you–once a month, bi-weekly, etc. If possible, you may want to consider putting a portion of every direct deposit (paycheck) directly into your savings account.
In addition to a regular savings account for emergencies, you may want to open a Holiday Helper savings account to prepare for holiday spending.
Explore High Interest Savings Options
If you can meet the minimum balance requirements, a high interest savings account can help you save more money this year. Your options include:
- Money Market Accounts: Money Market accounts let you earn a higher interest rate on your savings while still having access to funds in the form of six free withdrawals or transfers each month. Tiered interest rates mean the higher your balance, the more you can earn. Maintaining a minimum balance can help to reduce the fees on the account.
- Certificate of Deposit: CDs offer a guaranteed rate of return in an FDIC-insured savings account in exchange for your commitment to leave your deposit untouched for a certain term length. Choose from a variety of deposit amounts and term lengths.
Brown Bag Lunches
Save money on eating out by packing your lunch for work or bringing coffee from home, unless you’re lucky enough to work in an office with free coffee. Cutting back on restaurant meals and takeout food in general is a good way to save more money. Commit to weekly meal planning and cooking meals at home. If you’re strategic about grocery shopping and use what you buy, you’ll spend less money on food prepared at home.
Trim Subscription Services
Do you have a gym membership you don’t use? Make a point of going back to the gym or cancel your membership. The same thing goes for streaming services, app subscriptions, and any other recurring payments you’re signed up for. Choose the ones that you and your family use most and cancel the others or explore cheaper options.
Save Your Tax Refund
If you get a tax refund, work bonus, or any other extra money this year, add it to your high interest savings account to earn even more money.
Upgrade to an Interest-Bearing Checking Account
Why just earn interest on your savings? Consider upgrading to an interest-bearing checking account to earn even more. This is ideal if you can meet account balance requirements.
- Direct Interest Checking: All you need to do to earn interest is use this account to receive direct deposits or any other automatic deposits. You also qualify if you have an automatic payment set up.
- Premium Interest Checking: Once open; by maintaining a minimum balance of at least $1,500, you can earn a higher-than-average interest rate on your entire balance and avoid monthly fees. With a balance below $1,500 you can still earn competitive interest however there is a monthly fee.
- 50+ Interest Checking: Why wait until age 65? You can enjoy the perks of this interest-bearing checking account right now.
Take Advantage of Employer Savings Opportunities
- 401K Retirement Plan: If your employer offers a 401(k) plan, you should contribute at least enough to get your full employer match. 401(k)s also offer certain tax advantages.
- Health Saving Account (HSA): If you’re enrolled in a high-deductible health insurance plan, you can open an HSA either through your employer or on your own.
- Flexible Spending Account (FSA): Similar to an HSA, an FSA is also a tax-advantaged account where you can save money for eligible out-of-pocket health care costs.
Consolidate Debt
If you have multiple non-mortgage debts such as personal loans, credit card balances, etc., debt consolidation could help you streamline your finances and save more money. That’s because paying off several debts with one new, lower-interest loan can save on interest over the long run. Your debt consolidation options include:
- Home Equity Loan or Line of Credit: If you have enough equity in your home, you may be able to consolidate your debt with a lower interest rate on a secured HELOC or Home Equity Loan.
Reach Your Savings Goals at Field and Main
At Field and Main, we believe that banking should be built on a relationship. We want you to succeed and we are here to help with all your first-time financial needs today, tomorrow, and wherever you are! Contact a banking representative to learn how you can save more money this year and reach your financial goals. To open a new savings account, contact us or visit your nearest location in Western Kentucky, Central Kentucky, or Southern Indiana.
