This Suze Orman Tip Could Make a Huge Difference In Your Savings Account Balance

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KEY POINTS

  • Many people want to save more money.
  • Suze Orman recommends increasing the percentage of your salary you're saving via automatic transfer.
  • When saving money is automatic, you may not miss having more in your checking account.

Give this tip a try to boost your savings.

Do you want to increase the amount of money you put into savings? Setting more money aside for future financial goals can give you peace of mind and also improve your overall financial picture -- but it can be a challenge since you probably have lots of demands on your funds.

Fortunately, finance expert Suze Orman has a simple tip that could make all the difference in how much you end up putting aside to help yourself over the long haul. Here's what she suggests you do to increase your savings.

This simple tip could mean your savings account balance grows a lot bigger

To increase the amount you save, Orman suggested a three-step process. She recommends:

  1. Deciding how much you can save each month
  2. Adding 10% or 20% to that amount
  3. Setting up an automated transfer of the higher sum into your savings account

This may seem like it would be impossible, especially if you feel like the amount you've calculated you can dedicate to savings is already a stretch. But, as Orman explains, you may end up being surprised at how easy it is to adjust to your new reality.

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"What I have seen work over many years is that if you go ahead and set up the bigger transfer and stick with it for a few months-even if it seems like way too demanding a sum-what you will find is that you adjust to having less money in your checking."

If you follow this advice, you may find that the new status quo is easier to accept than you anticipated, just as Orman said it would be. But, if it turns out that's not the case, you can always make modifications later. "Just give it a try. If after three months it’s just too hard to do, then you can ratchet it down a bit," Orman explained.

Should you listen to Suze Orman?

Orman's advice here is definitely spot on and it's absolutely worth trying out her suggestion. If you do, the worst case scenario is that you end up saving more than you thought you could over a period of a couple months. And in a best case scenario, you'll be able to modify your spending to end up saving more over the long term than you thought you could.

The reality is, many people end up expanding their spending to fit the money they have available in their checking account -- even if they are not necessarily using the funds as wisely as possible or for the things that they prioritize most. It just becomes a habit to spend all the cash that comes in, simply because it's there and accessible.

But if you transfer the money into savings automatically, you should find that you're able to reduce your discretionary spending without making a huge difference in your quality of life. And while spending 10% or even 20% less on your wants may not have a dramatic impact on your day-to-day living standard right now, it definitely will go a long way towards helping you to build a savings account balance that enables you to do more in the future.

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4.00/5 Circle with letter I in it. 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. 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.
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