Practical Steps to Make Saving Money Easier
Everyone’s financial picture is different – but one thing most Americans have in common is a desire to increase their savings. Research has shown that a majority of consumers consider saving more money among their top financial goals for 2022, and it’s the most common financial priority by a wide margin across a varied range of consumers.
Those attitudes aren’t surprising when you consider that the median amount of savings for American households is $3,500 – meaning half the households have less than that, and half have more – and more than two-thirds of adult Americans have less than $1,000 in a savings account. Additionally, there’s a startling gender gap: More than 50% of women have no savings at all, according to findings from GOBankingRates.
Day-to-day, it can feel difficult to know where to begin increasing your savings – or even simply where to get started. The good news is, no matter where you are on your savings journey, these realistic, manageable and practical steps from KeyBank can help make saving money easier.
- Start with the end in mind
The first step is to set a realistic goal and create some scenarios for how to reach it. For example, if you want to save $500, then consider saving $5 per day for 100 days – just a little over three months. Or save $2.50 per day for 200 days – you’ll reach $500 in a little more than half a year.
- Free up cash
Take a good look at what you pay and why, make changes where you can, and add the difference to your savings:
> Evaluate your household utility costs and budget: Can you save on water or electricity by using less? Are you consolidating trips by car to spend less on gas? How often do you eat out per week?
> Monitor regular subscriptions and fees to make sure you haven’t forgotten to cancel a free trial of an app or service.
> Consolidate your debt for lower interest rates or a shorter payoff time.
> Streamline mortgage costs by looking into refinancing your home or shopping for a better deal on homeowners insurance.
- Have a plan for extra income
It’s tempting to look at a bonus check from work or an annual tax refund as a chance to splurge. And while it’s fine to use some of it to treat yourself and your family to something special, planning ahead to put most – or all – of it in your savings account can be a big step toward meeting your savings goals.
You could also use incremental income to pay off debt, add it to a retirement account or college fund, prepay your mortgage or make an investment in your home or a Health Savings Account. There are a lot of possibilities, but the important thing is to have a plan for these influxes and to stick to it when the cash arrives.
- Save automatically, a little bit at a time
There are a couple of ways to set aside money without thinking (much) about it. If you have a paycheck direct deposited into a checking account, you can adjust it so that a small amount goes into a savings account each pay period.
There are also banking apps and options that can place small amounts in your savings account when you make purchases. For example, KeyBank’s EasyUp® allows you to set an amount – anywhere between 10 cents and 5 dollars – that will be transferred from your checking account to your savings every time you make a debit card purchase.
What difference can that make? The average EasyUp user saves $415 in one year, and 18% of EasyUp users save $700 in one year.
- Check progress and make adjustments
Achieving your savings goals requires regularly checking on your progress. Did you stay on track last week to hit your monthly target? If something unexpected meant lowering your savings contribution last month, what can you do this month to make it up?
Thinking in terms of maintaining progress over time helps establish the financial habits needed to build up the savings you’re aiming for.
Your Financial Future
Remember that goals can change. There are a multitude of approaches to saving money, so be open to learning about new and different methods of building for a stronger financial future. They often revolve around the key savings contributors of setting goals, planning how to allocate incoming funds – such as tax refunds – and committing to a plan.
The KeyBank team is always available to assist you and help you get started with a Key Financial Wellness Review – so bring us your questions, ideas and goals, and together we’ll get you moving in the right direction.