3 Savvy Savings Hacks for Building Wealth in 2024

Building wealth requires you to save money, and that can be harder than it seems. In fact, the Bureau of Economic Analysis reported that Americans had a personal savings rate of just 3.7% as of December 2023.

The good news is that there are a few simple techniques you can implement to make saving money and growing your net worth easier. Here are three of them.

1. Cut your fixed expenses

When many people try to save, they aim to do so by reducing discretionary expenses. These are the things you can choose to spend money on every month, like getting a coffee at Starbucks, eating out, or buying yourself some new shoes or comic books.

The problem is, when you cut these costs, you have to force yourself to sacrifice time and again -- often, for not that much gain. If you save $4 a day on your coffee, for example, you'll end up with a maximum of $124 extra a month to save. That's not bad, but a lot of sacrifice went into saving that.

Instead of trying to constantly deprive yourself of things you enjoy, it's a lot easier and more effective to try to cut a big fixed expense. That way, you can make one cut and adjust once. You could, for example, save an average of $193 a month by borrowing for a used car instead of a new one.

Opting for a cheaper vehicle or cheaper housing are just two possible ways to cut a fixed expense. You could also drop a gym membership, refinance your debt, shop for cheaper insurance, or cancel your cable. The key is to look for as many big recurring expenses as possible and find a way to make a change to those costs rather than chipping away at your fun spending.

2. Automate your savings

Making savings automatic is another savvy saving hack. See, you don't want to have to force yourself to always move money to savings, because it will often be too tempting to just spend the money instead. If you have a set amount moving automatically over to your savings accounts, on the other hand, you won't have to worry about making the choice to save -- the money will just go where it needs to.

You can sign up for an automatic transfer of money to savings on the day you get paid. Most banks make it easy to do. Once you've done that, you're a lot less likely to go back and undo it, and you can quickly adjust to living on what's left over in your checking account.

3. Pick the right account for your money

Finally, you'll want to make sure you're putting your saved money in the right place. The average interest rate on a traditional savings account, for example, is just 0.47% while high-yield savings accounts offer the chance to earn upward of 5.00% right now in today's market. If you know you won't need the money for a while, you can do better by investing in a certificate of deposit or even a brokerage account, depending on your investing timeline.

CDs can lock in today's high rates for you, and often provide better yields than savings accounts, but you need to be OK locking up your money in the bank for the duration of the CD term (this could be months or years, depending on the CD you choose). And investing with a brokerage account could allow you to earn even higher returns, with the S&P 500 providing an average 10% annual return over the long haul. Of course, you would only want to invest if you won't need the money you're saving for at least five years, because otherwise you face a big risk of losses if you buy and sell at a bad time.

By taking these steps, you may be able to save a good amount in 2024 and make real progress in your wealth-building journey.