As the New Year kicks off, many of you have financial or savings goals in mind. One of mine, as it has been for the last few years, is to save more money. Life happens and it’s sometimes difficult to keep your short-term cash savings built up. So feeling the need to save more myself, I thought I would share some ways my wife and I are working on this goal.
Establish a Budget
Establishing a budget is by far the best way to save more money. We can check that one off the list because we’ve been using You Need a Budget (YNAB) money management software for the last several years to manage our spending. We review our budget each month and update it as needed. By having a budget, we’re in control of our financial goals and priorities which means we ‘re trying to force ourselves to live on money left after saving.
Open a Savings Account
The next thing I recommend is opening a savings account with a competitive interest rate. You’ll also want to look for an account that doesn’t have monthly maintenance fees and has low or no minimum deposit requirements.
I’ve been seeing a lot lately about the CIT bank and Ally bank savings accounts so I provided a brief overview of these two options below, if you’re considering a new savings account.
CIT Bank has been around over 100 years (since 1908). They require a minimum $100 deposit to open a savings account. There are no monthly maintenance fees and interest compounds daily. Larger balances earn more interest.
Ally Bank was ranked best online bank by Money Magazine for the second straight year. Ally doesn’t require an opening deposit and as with CIT bank, there are no monthly maintenance fees and interest is compounded daily. As a nice additional feature, Ally has a mobile app and recently added check deposit capabilities to it.
Both of these accounts are worth considering on your short list of savings account options.
Automate Your Savings and Leave it Alone
You may have all the right tools in place (a budget and savings account), but that’s probably still not enough. Personal finance expert, Liz Weston, has this to say about making savings easier:
The easiest way to save is to do it without thinking about it.
That usually means setting up automatic transfers either from your paycheck or from your checking account. If you have to think about putting aside money, you’ll probably think of other things to do with that cash. If it’s done automatically, you may be surprised at how fast the money piles up.
The second part of this equation is to leave your savings alone. If you’re constantly dipping into savings to cover regular expenses, you won’t get ahead.
People manage to save even on small incomes because they make it a priority. They “pay themselves first,” putting aside money for savings before any other bills are paid. Start with small, regular transfers and increase them as you can.
There you have it, 3 ways to achieve your savings goals this year. To recap, make sure get the right tools in place with a budget and high yield savings account and then put your savings on auto pilot by automating the transfers.
Is saving money one of your goals this year? If so, how do you plan to save more?