Empower Blog

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January 25, 2022

Simple Ways to Start or Grow Your Savings

The start of a new year is a great time to consider your financial priorities and set new goals for the future. One common aspiration is to save more money, so we've put together some simple steps to help make that more achievable.

Getting Started

If saving money hasn't always come easily for you, it can be hard to know how and where to begin.

One of the first steps you can take is adding savings to your monthly budget. Record your expenses to find out how much you spend. Once you understand where your money is going, organize your costs into categories to determine how much you may be able to allocate to savings. Make it a tangible line item you plan for each month, rather than an afterthought, to help you see it as a priority and track your progress.

Just like planning for non-essential spending, try to set aside a certain percentage of your gross pay for savings in your monthly budget. A good rule of thumb is to aim for around 20%, but don't be discouraged if that's not realistic for you. Everyone's financial situation is different, so find a number that works for you and stick to it. You can always start small, even $20 a month adds up over time.

Think of it as paying yourself first. Direct deposit isn't just for checking. Once you've decided on a number you’re comfortable with, set up your direct deposit to funnel it into savings. This allows you to bypass the opportunity to spend it and grow your savings more steadily. Making it automatic also makes it easier to reach your savings goals, as you'll be less likely to forget or cave to impulse spending. This is why it's important to set up a separate savings account from your checking. Putting the money aside in a more official manner adds an extra layer of protection against the temptation to spend it.

Growing Your Savings

Once you've got the basics down, you can shift your focus to finding ways to grow your savings.

One strategy to help increase your savings is by curbing spending. While it may seem obvious, it can also be easier said than done. Here's a few ideas to take a fresh look at your spending habits:
  • Make a list before you go grocery shopping to avoid impulse purchases and stick to what you need.
  • Downsize on purchases by determining your priorities to decide what splurges are worth it and what items could be swapped for a cheaper or generic brand.
  • Don't use shopping as entertainment. Avoid creating online shopping carts out of boredom or mindlessly scrolling branded content on social media to avoid temptation.
  • If you do start an online shopping cart, leave items in it for a day or two and see if you're still thinking about it later to help you decide if the purchase is worth it.
  • Reevaluate monthly memberships and subscriptions to cut down on ones you don't use often.
  • Find ways to get deals and discounts where you can. There are many options thanks to technology, such as apps, loyalty programs, coupon codes, social media check-ins and receipt upload reimbursements.
  • Unsubscribe from branded emails to help you curb unnecessary impulse shopping.

You can also help grow your savings faster by taking advantage of a savings account with a good interest rate. The higher the interest rate, the more quickly your savings will grow over time. Our High Interest Savings account is a great place to start, with an incredible rate of 4.00% APY1 on balances up to $1,500.

And remember, pay yourself first. This continues to apply all along your savings journey. So, whenever you get a raise, aim to also bump up your percentage of income going into savings to continue making your savings a financial priority.

Finally, whether you're just getting started or working towards maximizing your savings, it's important to set goals for yourself. Having something you’re saving for that you can visualize helps make it all feel worth it. Perhaps it's something fun and short-term, like a vacation or a new car. Or maybe it's something long-term that carries more weight, such as retirement or a child's future education. Having something to focus your efforts makes it easier to commit and remember your 'why'.
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