When you made your resolutions at the start of the year, was saving money one of them? How’s that going? According to the third annual State of Savings in America survey by PurePoint Financial, a digital bank and division of MUFG Union Bank, half of Americans believe creating a savings plan is an important goal, but nearly one-third think it’s more likely they’ll achieve their “dream body” in 2020 than reach an annual savings goal. And 51 percent think they’re more likely to travel to an exciting new place than achieve their savings goal this year.
While 84 percent of Americans said they were saving for something, only two in five felt confident about their money-saving habits, regardless of their age.
What are the most effective strategies when it comes to saving money? Here are some tips:
Establish a goal
Saving money is always easier with a concrete goal in mind. From there, you can devise a plan to reach that goal. You may want to create a vision board or other visual tool to help keep you inspired and motivated to stick to your plan.
Savings goals could include:
- Creating an emergency fund—aim for three to six months’ worth of expenses
- Paying down a debt
- Saving for an important purchase or investment, such as a household appliance or down payment on a car or house
- A special vacation
Set it and forget it.
If you’re going to save your hard-earned money, you’ll want an account that works hard for you, too. Begin saving immediately by setting up monthly automatic transfers into a savings account that offers a competitive rate.
For example, if you begin setting aside just $20 each week, you’ll have $1,040 (plus interest) saved within one year. Automatic savings deposits help create positive habits for your future success—and if it’s automatic, you won’t have to think about it.
Talk it out
According to the new survey, over 20 percent of Americans would rather talk to their best friends about an embarrassing health issue than the status of their savings account. Nearly three in 10 who considered themselves bad at saving reported they hide the fact that they have little to no savings from friends because they feel ashamed.
While it can be hard to talk about your finances, chances are your friends and/or family may be in a similar situation. By opening a dialogue about financial goals and challenges with others, you may learn new tips and tricks to spend less and save more, which will help you stick to your plan. Having a buddy to keep you on track can also be very motivating.
Compare rates and shop around
Make sure that you’re comparing available savings rates and getting the best possible rate for you. If you’re not getting at least 1 percent on your account, you’re leaving money on the table, so it’s time to start shopping around.
Save what you can
Just getting in the regular habit of saving is key to improving your financial confidence. Try to save at least 10 percent of your income if you can. However, any amount is a good place to start. What’s important is that you build the habit of saving now.
Eliminate money drains
Just as older generations used to pay for magazine and newspaper subscriptions they never read, paying for today’s streaming services and other online subscriptions you don’t use can drain money you could be putting into savings instead.
According to the survey, one in three Americans do not regularly review their subscription services to keep track of how much they’re spending—and it’s very easy to lose track. Take a good look at your monthly bills, reviewing automatic payments to find subscriptions you may not be using. Once you’ve cancelled any subscriptions you’re not enjoying, total up what you were paying and set up monthly automatic withdrawals for that amount into your savings account instead.