Want to Boost Your Savings? 4 Expert Tips to Get Started
If you're hoping to grow your savings, here's how to pull it off.
The more money you have in savings, the more financial security you'll buy yourself. Having money in the bank could spare you from racking up debt when financial emergencies strike.
But growing your savings is no easy feat. It takes hard work, discipline, and perhaps a little expert advice to kick things off. To that end, we talked to Chris Wong, Consumer Savings Executive at Bank of America, and he had some important savings-related insights to share. Here are his top tips for growing savings with minimal struggle.
1. Stick to a budget
Following a budget may seem complicated, but it doesn't have to be. What you can do is list your expenses, compare your total monthly spending to what you bring home in your paychecks, and make changes as needed to ensure that you're able to free up cash. Wong insists that budgeting is one of the first steps to building more cash reserves. "Always budget and track your spending," he says, "so you can find money to save and identify expenses to cut back on."
2. Take it slow
Your savings account probably isn't going to grow by $1,000 overnight -- and that's okay. In fact, it's important to establish reasonable expectations in the course of your savings efforts. As Wong says, "Set measurable and achievable short-term savings goals that will help benchmark your progress and provide motivation as you work toward long-term ambitions." You could, for example, aim to save $10 a day, or $50 a week, if that's easier to wrap your head around than larger numbers.
3. Save automatically
Most banks now offer an automatic savings feature where you can move money directly from your checking account to savings without having to do a thing. It pays to take advantage of this option if your goal is to sock away more cash. "Saving automatically is the easiest way to save," explains Wong. "When you automate your savings, you’re paying yourself first, reducing the temptation to spend that money on other things and prioritizing your goals and long-term financial health without having to think too much about it."
Of course, if you can't afford to part with a large sum of money each month, start small. "Saving even a few dollars each month can help you build positive habits," Wong insists. "That said," he continues, "don’t just set up automatic savings and walk away forever. It’s important to check your budget to ensure that you’re contributing the right amount of money relative to your current financial circumstances."
4. Forget the past
Think back to the last time you tried to boost your savings. Did it go well? If not, you may be carrying that burden with you as you attempt to grow your savings this time around. And that's not helpful at all. A better bet? Look forward, not backward. "Don’t get hung up on the trouble you’ve had sticking with saving in the past," says Wong. "It’s never too late to begin saving, and today is always a good day to start."
So there you have it. Saving money can be difficult, but it doesn't have to be. And remember, if you close out 2021 with $200 more than you started with, it means you saved money. You may not hit your entire goal in the course of a year, but the key is to keep at it and not give up.
These savings accounts are FDIC insured and could earn you 11x 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 11x 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 2023.
Our Research Expert
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 Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2023 The Ascent. All rights reserved.