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4 Savings Tips That Actually Work

by Maurie Backman | Feb. 13, 2021

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

Woman dropping coin into piggy bank

Image source: Getty Images

Want to boost your cash reserves? Here's how.

We all need money in savings -- for emergencies, life goals, and even fun stuff, like vacations. But building your savings is easier said than done. We all have bills to pay and unplanned expenses that pop up and thwart our efforts.

If you've struggled to save money in the past, don't give up. Maybe you just need to take a different approach. Here are a few tips that could increase your chances of success.

1. Put everything on autopilot

It's much easier to save money when you're effectively forced to do so. And the way to make that happen is to set up some automatic transfers. First, you can arrange for a portion of each paycheck to transfer automatically from your checking to your savings account. That way, you won't get an opportunity to spend it. You can also sign up for your employer's 401(k) plan and have money deducted from your paychecks off the bat for retirement. And if you don't have access to a 401(k), you can open an IRA with an automatic savings feature and do the same.

2. Set reasonable goals

If you generally save anywhere from $0 to $50 a month, you can't expect yourself to suddenly start saving $500 a month. A big part of saving successfully is setting reasonable expectations. In this example, starting with a monthly savings goal of $100 or $200 could be a better bet. That way, you're less likely to fail, get discouraged, and stop trying.

3. Reduce one expense at a time

Some people decide to get serious about saving money and then go on a major expense-slashing spree. That may be effective for a short while, but on a long-term basis, it's just not sustainable to cut out all luxuries. After a few months, you're likely to crack and give up. A better approach? Tackle one spending category at a time. Spend less on takeout one month. Cut back on clothing purchases the next month. And the month after that, cancel a streaming service you rarely use. If you do things gradually, you're less likely to feel overwhelmed, which means you're more likely to keep up your savings efforts over time.

4. Bank all windfalls

Chances are, you'll manage to get your hands on some extra cash in the course of the year. Maybe you'll get a tax refund from the IRS. Maybe another stimulus check will come through. Or maybe you'll finally be rewarded for your efforts at work with a generous bonus. Either way, that extra cash can serve as a prime opportunity to pad your savings, so resist the urge to spend it.

Let's face it -- saving money generally isn't as fun as spending it. But if you don't build some savings, you could experience some major financial headaches down the road. You risk racking up debt when emergency expenses strike. You may also miss out on opportunities you may want for yourself, like buying a home. So it pays to push yourself to save, even if that means giving some things up along the way. In fact, once your savings reach a healthier level, you may find the peace of mind it brings will more than make up for the sacrifices you endure to get there.

These savings accounts are FDIC insured and can earn you 12x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 12x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2021.

Two top online savings account picks

Rates as of Feb. 15, 2021 Ratings Methodology
Logo for CIT Bank Savings Builder
Logo for American Express® High Yield Savings Account
CIT Bank Savings Builder American Express® High Yield Savings Account
Member, FDIC Member, FDIC
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 5.0 out of 5 stars.
5.0 stars
ToolTip Icon for Star Rating. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best
= Excellent
= Good
= Fair
= Poor
Open Account

On CIT's Secure Website.

Open Account

On American Express' Secure Website.

Read Review Read Review

APY: Up to 0.40%

APY: 0.50%

Best For: No monthly maintenance fee

Best For: High APY

Min. to earn APY: $25k or $100 monthly deposit for highest tier

Min. to earn APY: $0

About the Author

Maurie Backman
Maurie Backman icon-button-linkedin-2x

Maurie Backman is a personal finance writer who covers everything from savings to retirement to healthcare. Her articles have appeared broadly on major outlets such as CNBC, MSN, and Yahoo.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.

The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.

The Ascent is reader-supported: we may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation.

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