Ways to boost your savings
Help build a stronger financial plan today with these ideas for building your savings.
Who needs help improving their money habits? Almost everyone, it turns out. At the beginning of 2022, 64% of the U.S. population was living paycheck to paycheck. Not only that, but a 2022 press release from Lending Club indicates that 48% of American workers making more than $100,000 a year were also living paycheck to paycheck. This leaves little wiggle room for unexpected expenses — or achieving goals like buying a home, planning for retirement or traveling.
The solution, of course, is to spend less and save more. Beginning to create a savings plan and build an emergency fund are crucial, but that can feel overwhelming. So, what do successful savers know that you can use to create better money habits? It's helpful to break down attempts to change the spend-save cycle by creating bite-size goals.
Check your credit score... really
Good news: Surprisingly, 54% of Americans never check their credit score. Experts recommend doing a check a few times a year from one or all of the three credit bureaus (Equifax, Experian, TransUnion). Bonus: It's free. (If you check your credit score, it doesn't hurt your number; if a lender or credit card issuer does because you've applied for a new card, it might.)
How you'll save: Credit score checks can turn up mistakes, including bills that you've already paid. In addition, if you can improve your credit score and you're planning a big purchase this year, you can save by snagging a better interest rate. Or if you're trying to lower credit card debt, a higher credit score may get you a lower credit card rate.
Determine and automate a regular savings total
Save $5, or $50 — Choose an amount that you can contribute on a schedule that works best for you. To reinforce your savings habit, consider scheduling a specific day to put money aside. For example, on paydays, or every other Friday. Don’t forget to adjust your savings if you get a raise or other extra income.
How you'll save: With automation, a savings account can grow with little effort on your part. But where savings really start to shine is when you see the growth — thanks to compound interest — and how much closer you are to your savings goal. It can be easier not to spend on an impulse item if you know you’ll have to wait longer for that new car or another year for a house. And the earlier you start these habits, the more time your money has to grow before you need it.
Track one spending category for a week
If you've never set up a budget, then you might only have a rough idea of how much you're spending on necessities such as utilities and extras such as clothing. If you track one expense each week it can reveal where small expenses are adding up, and not only help inform your budget building, but your savings goals as well. You could decide to eliminate one take-out meal per week in order to bolster your house fund faster.
How you'll save: Count up your clothes budget. If you're like many Americans, you spend about $134 each month. If you trim it by just about $20 and add that to your emergency fund, you can reach that savings goal faster without having to sacrifice much. (Experts recommend about three to six months of salary stashed away for unexpected expenses.)
Spend 60 minutes on tax time
Alleviate part of the mad January scramble: Gather and organize receipts and figure out the deductions you have so far. Think about possible charitable deductions and tax-advantaged contributions.
How you'll save: If you avoid overreporting charitable contributions, you'll save a headache and potential fines if the IRS finds you in violation of established rules. And if you know how to deduct contributions, including obtaining written statements, then you'll make sure to have the documentation you need in order to reap the most tax-time rewards.
Binge on canceling
Magazines, cable service: Examine your cable bill. How many stations do you really watch? Could you live with a smaller package?
How you'll save: By letting go of a premium channel, you may be able to save $5 - $20 each month. Returning any unused cable boxes or DVR can also help trim your monthly bill.
Give yourself a challenge
One we like: The 30-day nonessentials rule. When you want to buy something non-essential, put it back on the shelf and only buy it a month later if you decide you still truly want it.
How you'll save: Money you don't spend is money you can decide to do something else with. To make the results of the challenge tangible, record the dollar amount of the thing you wanted to buy and transfer that total into your savings account.
Program your thermostat
Many of the best things for your finances are also the most adultlike — oil changes for your vehicle and thermostat programming. Maintenance pays off.
How you'll save: Set up times that boost your home temps in the summer and lower them in the winter when you're gone, and you can knock about 10% off your utility bill.
Eat out one less time this week
The average American spends over $2,375 a year dining out — that's over $45 every week per person. You could try your hand at meal planning and prep, not to mention packing a lunch, which might save time and last-minute scrambles.
How you'll save: Trim just one week a month and pop it into a savings account and you'll have almost $550 — enough for a pretty nice airline ticket. There are many ways to save money without sacrificing fun with friends.