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Just Started Saving? Here Are Next-Level Strategies

By Alizah Salario

  • PUBLISHED September 30
  • |
  • 6 MINUTE READ

Congratulations! Maybe you’ve just opened your first real savings account, or maybe you’ve had an account for a while and now you want to get serious. Either way, saving money is a crucial step toward reaching your goals.

If you want to take your saving strategies up a notch, you’ll need to take a hard look at your spending habits, set some firm guardrails and stick to them. The following five strategies can help you supercharge your savings by maximizing the amount you can put away each month. 

Establish Your Savings Goals
Ask yourself what you want and then write it down. Setting realistic goals can help you stay motivated over the long haul. If you know exactly what you’re saving for, you’ll feel more motivated to put away money instead of spending it. 

The SMART method can help you stay on track by helping you set goals that are specific, measurable, attainable, relevant and timebound. Let’s say you’re saving up to buy a house within five years. Start by pricing potential properties, then figure out how much you’d need to save each month over your time horizon to have enough for a down payment. (If you save 20% of the purchase price, then you can avoid having to pay for mortgage insurance—additional savings over time/over the life of your loan.)

Measuring your potential savings can also help you figure out what’s realistic. Maybe that means you’ll opt for a smaller home than you envisioned, or you’ll extend your timeline by a few years. Either way, the planning process is like a sandbox where you can work out the details.

When you’re working toward your big goals, celebrating mini-milestones can help inspire you. Maybe you treat yourself to a bottle of wine for every $1,000 saved or share your achievement with friends to get their support.

Bucket and Budget
Once you’ve set your goals, creating a budget can help you save more money over time. Many experts recommend using the 50/30/20 budgeting rule: Try putting 50% of your income toward fixed expenses, 30% toward variable expenses and 20% toward your savings. 

Once you’ve established how much you can save, you may also want to set up different bank accounts to save for each goal, so you can keep everything organized. You can also add “buckets” to your budget so you know what goals are being accounted for. 

How you determine the amounts that go into each bucket will depend on the specifics of your financial situation, like whether you have any student loan or credit card debts. It’s generally a good idea to save a little bit for all of your goals at once, though you may be more aggressive about saving for goals that are timely or urgent.

Maximize Your Deposits
A key to saving is getting as much money as possible into your savings account. (Leaving it there is the next step.) 

Once you’ve laid out your budget, set up automatic deposits that make transferring the money from your day-to-day checking or debit account seamless. Auto deposits take just minutes to set up and make it easier to save a consistent amount from each paycheck or monthly cycle. You’ll also avoid the hassle of remembering to make repeated transfers.

As your earnings increase, so should your savings deposits. Let’s say you’re currently saving 10% of your income. You can still save the same percentage, but the dollar amount will be higher, each time you get a raise or a bonus. And to really take your savings to the next level, sock away any extra money you receive, like a cash birthday gift, your tax refund or proceeds from a garage sale.

Don’t stop there. Review your monthly expenses and figure out where you can trim. Is there a subscription service you’re no longer using? Can you cook at home more often instead of dining out? Review your purchases in various spending categories—such as household expenses, food and entertainment—and try trimming each by just a few percentage points. Then redistribute that money to your savings accounts. Those little deposits can make a big difference over time.

Don’t Touch It
Once you’ve managed to save, the next step—and perhaps the hardest—is keeping it in the bank. The temptation to dip into your savings is real. That’s why it’s important to get into the savings mindset and develop strategies for those moments when you feel the urge to splurge. 

One way is to use cash for purchases so that you have a tighter grip on your day-to-day spending. If you have a weak spot for online shopping, try setting up browser extensions like StayFocusd that will block tempting sites during specific times of day. Practice the 24-hour rule by keeping an item in your online shopping cart for a full day before clicking purchase. You may realize you don’t really need those bedazzled sneakers after all. 

And you can use less liquid accounts, such as certificates of deposit, to ensure you don’t dip into funds you know you won’t need in the immediate future. You won’t be able to access money in a CD without a penalty—but that’s the point. You can put money away in a CD for a set amount of time, ranging from three months to five years, in exchange for what is often a higher interest rate. 

Review, but Don’t Over-Review
Once you get in the habit of saving, reviewing your progress can be very rewarding. You’ll want to schedule regular times to check in on your balances, and experts recommend doing so quarterly. If you’re prone to forget, set up calendar notifications to help you remember. 

Checking your balance too often may make you hyper-aware of what money you have stashed away, keeping it top of mind. If that’s the case, you may end up tinkering with an account when nothing needs changing. Sometimes it’s better to lose track of your progress!

Alizah Salario is a freelance writer and editor based in Brooklyn, NY. Most recently, she covered personal finance for CNBC’s Grow magazine.

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