Most of us have to save for the things we really want out of life. Whether it’s a college fund, house down payment, pay-off credit cards, build a nest egg or take a dream vacation, a savings plan can help you reach financial goals faster.
But getting started with a savings plan can be difficult to figure out. Here are 5 easy ways to start saving money plus several high-interest savings, money market and CD accounts that can grow your money faster:
Record your expenses
In order to start a savings plan you’ve got to know where your money is going. Make recording your expenses easy. Get a notepad or even an app on your smartphone to record your daily spending. Record every dime you spend for about a month.
That means every coffee, lunch, snack, your mortgage, utilities, magazines or newspaper, lottery tickets, hair product…everything. Know where you’re spending money. Once you have the data organize the numbers in categories of groceries, dining out, mortgage, entertainment, etc.
Spend Less on small-dollar items
Now that you have a record of your expenses look for ways to spend less. Something that seems minor like a $3 coffee or frappuccino everyday can add up over 30 days – That’s $90. Cutting something small adds up. When you spend less on small-dollar items you increase savings.
Look for non-essentials that you can spend less on – entertainment, eating lunch or dinner out. You will be surprised with how much extra money can be accumulated. Make a little extra dinner to take for lunch the next day, it’s that easy.
Set savings goals
Setting savings goals makes it much easier to get started. Pick a reason or several reasons you want to save money. And, remember a savings plan can also include something fun where you splurge on yourself. Decide how long it will take to reach each goal. Some goals could be:
- Emergency fund to cover at least 6-12 months in case of job loss or other emergencies.
- Down Payment for a Mortgage or a New Car
- Computer Equipment
- Entertainment System
- Designer Handbag
- Expensive Watch
Get a Savings Tip Jar
Tip yourself at home. Stop spending $5.00 bills and instead stash them away in a jar at home. It’s like tipping yourself. Sit back and watch those $5.00 bills grow.
Save by Automatic Transfers
Once you cut non-essential items from your budget try to save at least 10-15 percent of your net income. It may be less or perhaps more than 10-15 percent, just start where you can but make it automatic. Saving money becomes much easier with automatic transfers. By moving money out of your checking account, you’ll be less likely to spend funds that you wanted earmarked for savings.
There are many options for setting up transfers. You choose how often you want to transfer money and which accounts you want the money transferred between. You may even want to open a savings account at a separate bank. Having savings out of sight of your regular bank may help make it easier to maintain.
Extra Tip – Find High-Interest Savings Account and Move Your Savings Online
Here is an example of FDIC-insured online deposits accounts for short and long-term savings goals with higher than average rates that help grow your money faster.
High-interest savings accounts pay a significantly higher rate of interest on deposits while offering the same Federal Deposit Insurance Corporation (FDIC) coverage of $250,000. They’ll help you meet your savings goals faster.
Current Savings — 4.00% APY
The Current Savings Account offers an APY of 4.00% but you can only earn that rate on funds up to $6,000. However, you can grow $6,000 of your savings 60x faster than the current national savings rate average. With Current Savings Pods, you can organize your savings goals while making money on your cash. The more you put in, the more you’ll make. It’s that simple.
Minimum opening deposit: $10.00
Monthly fee: $0
Requirements: You must open the Current Spend Account which is essentially a checking account to be eligible to earn a 4.00% Annual Percentage Yield (APY) — a rate that’s 60x higher than the national average.
UFB Direct Savings Account — 1.66 percent
UFB Direct UFB Direct is a division of Axos Bank, offering branchless banking to customers that desire exceptional high-interest rates on savings and money accounts. Accounts at UFB Direct are FDIC insured to the maximum allowable limits ($250,000) per depositor.
Minimum opening balance: $100.
Interest rate: 1.66 percent.
Monthly fee: None.
CIT Bank Savings Connect Account — 1.35% APY
CIT Bank is one of the best online savings accounts offering a stellar interest rate. It only requires a minimum deposit of $100 to open an account but you must also open the CIT eChecking also. Opening the Savings Connect/eChecking combo gives the benefits of easy access to your funds with your linked eChecking account. CIT Bank does not charge a monthly fee.
Minimum balance: $100 to open.
Monthly fee: None.
Easy deposits: Deposit checks remotely and make transfers easily with the CIT Bank mobile app.
Digital convenience: With online banking and the mobile app.
Quontic High-Yield Savings — 1.70% APY
Customers can earn an annual percentage yield (APY) that’s over 9x higher than the national average with interest compounded daily and credited to your account every month. Quontic Bank’s customers enjoy the convenience of banking online or with a dynamic mobile app with features like remote check deposit, bill pay, account transfers, the ability to send money through Zelle® and receipt tracking make managing your finances easy.
Minimum opening deposit: $100.
Monthly fee: There are no monthly service fees.
Requirements: You’ll need some personal information including your Social Security number and a valid U.S. government-issued ID, an external bank account for funding, and $100 to open a checking or savings account.
Axos High-Yield Savings — 0.61% APY
The Axos High-Yield Savings Account offers an APY of up to 0.61%. Customers can set up account alerts, enable or disable your ATM card, and manage your Axos Bank High-Yield Savings account online. You can also use its mobile app to do any of those tasks. With the Axos High-Yield Savings Account you’ll get an APY that’s 6X the national average. On a $10,000 balance, you’ll earn $61 annually compared to just $10.
Minimum opening deposit: $250.
Monthly fee: Axos Bank doesn’t charge you a monthly fee.
ATM Card: Axos is one of the few banks that offers customers an ATM card with their savings account.
Requirements: You can earn the 0.61% annual percentage yield for balances under $25,000. Balances between $25,000 and $99,999.99 earn 0.25% APY, and balances over $100,000 earn 0.15% APY.
The advantages of online accounts
Online banks can offer a range of higher interest rates and products because they don’t rely on brick-and-mortar branches that come with multiple overhead costs. Many online banks charge no monthly service fees, so more money stays in your account. And, of course, your deposits in online banks are FDIC-insured.
With these easy ways to save money, you can reach your goals faster. When considering an online high-interest savings product, make sure to review the following:
- Required Opening Deposit: How much money do you have to deposit to open the account?
- Minimum Balance Required: Do you have to maintain a certain deposit to earn the advertised rate of interest?
- Rate of Interest Paid (APY): How much interest will you earn on your deposits. Is it an “introductory” rate that changes at a certain point or is it the permanent rate? Does the rate apply to existing as well as new customers.
- Compounding Method: How is the interest compounded and calculated on your savings? There are several compounding methods including daily, monthly, quarterly, semiannually and annually.