One of the cornerstones of financial wellness is learning how to save money. Even small expenses add up quickly—from coffees and subscription boxes to flat tires—making it all too easy to spend more than you make. Start saving by placing any spare change into a jar or using an app that rounds up purchases to the nearest dollar and transfers any difference into your savings account. Setting short-term goals can also be an effective way of starting to save.
1. Know Your Limits
Establishing realistic savings goals begins with knowing your limitations. For instance, it might be possible for you to save for a vacation but not afford a new car purchase. A savings calculator can also help determine how long it will take you to reach your target goal.
Make sure that you create an emergency fund. Doing so can help protect you against over-reliance on credit cards or loans, which can become costly quickly. An envelope budget system can help cut back on unnecessary spending while contributing the savings directly into an account for emergencies.
2. Set Goals
If you have an ambitious financial goal in mind, such as saving for a dream vacation or an emergency fund, break it into smaller, more manageable chunks. For instance, setting up a bucket with regular transfers from each paycheck could help ensure you remain on track towards meeting it.
Automating transfers after payday may also make saving more appealing; just be mindful of your time horizon—certain goals require savings, while others might require investments that can withstand market fluctuations over the long haul.
4. Get a Second Chance Checking Account
If you have had difficulty opening bank accounts due to bounced checks or other serious banking issues in the past, second chance checking accounts offer an ideal solution. With such accounts you can rebuild a positive financial history, leading to even better banking opportunities in the future.
Finding a second chance checking account that meets your needs can be challenging, but when you do, it’s worth your while to read all the fine print and understand fees, minimum balance requirements, services offered, restrictions, and fees before choosing one. Once selected, you can then use it to automatically start saving while setting savings goals via automatic transfers from your checking account into savings.
5. Create a Budget
Budgeting is an integral component of money savings. Begin by outlining all of your expenses and goals, then establish how much of your income you’ll allocate toward each expense or goal.
Make sure to account for all mandatory expenses such as rent/mortgage payments, utilities payments, and car payments, as well as variable expenses like groceries and entertainment. In addition, look for areas in which you could cut costs, such as switching cell phone plans or buying store-brand groceries. Make more significant changes, such as moving to an affordable neighborhood or switching to less costly health insurance options.
6. Make Savings a Priority
Saving is an integral component of any sound financial plan, providing protection from emergency expenses and retirement while creating the opportunity to grow assets over time. Start off right by keeping track of all your expenses using an expense tracker app, spreadsheet, or pencil and paper to record every single expense, such as coffee, household items, cash tips, and monthly bills.
Once you know how much money is going out each month, determine how much can be saved monthly. Setting goals can help keep you on the path toward saving—helping to divide short- and long-term objectives for savings goals.
7. Set Up Automatic Recurring Transfers
Set up recurring transfers as an easy and effective way to automate your savings efforts. From emergency funds and vacations to future educational expenses and even retirement funds, setting up regular transfers can help you reach your savings goal more quickly than ever.
Some banks provide automated transfers from checking to savings or allow you to split your direct deposit so part of each paycheck goes straight into savings. Huntington offers an online banking tool called Money Scout that analyzes your spending and income habits to find any extra dollars that can be moved from your checking account into savings automatically.
8. Take Advantage of Second Chance Checking Accounts
Those with bank account histories that include overdraft charges or negative balances may find qualifying for standard checking accounts difficult. Second-chance checking accounts offer another chance to rebuild your banking history and show financial institutions that you can be a responsible customer.
These accounts often offer more flexible signup requirements than traditional banks and can help you rebuild your finances more easily. They usually don’t charge monthly service or overdraft fees either! Second chance checking accounts come in two varieties: time-based and paycheck-based. Time-based accounts allow for automatic transfers from your checking to savings accounts on a schedule you specify.
9. Stick to Your Budget
Sticking to your budget may not always be simple, but it is essential for financial success. Whether your goal is saving for a vacation, purchasing a home, or paying off debt, being disciplined about where your money goes will help ensure its successful accomplishment.
If you’re having difficulty staying on track, try reviewing past paychecks, credit card, and bank account statements to identify problem areas where money might be wasted or overspent. Making simple changes like cancelling services you don’t use or finding cheaper cell phone plans may save a significant sum over time.
