Wondering How to Save Money Fast? 6 Ways to Earn Interest on Savings

Saving money is one of the most common financial goals our members have. They may be saving for an emergency fund or a long-term savings goal like buying a house, but either way, they want advice about how to save money fast.

At Leaders Credit Union, we work with our valued members every day to help them improve their financial health and achieve their personal finance goals. If you’re wondering how you can build your savings quickly, we’ve got the answer. Here’s our list of the six ways to earn interest on your savings and reach your next financial goal.

How Can I Earn Interest on My Savings Without Taking Big Risks?

Earning interest on your savings is a good way to maximize the money you save. You may have some of your money invested, and all investments come with some degree of risk. That said, you can keep your savings liquid and accessible and earn interest with little or no risk. Here are some low-risk savings vehicles to consider:

• High-yield savings account (HYSA)
• Money market account
• Certificate of deposit (CD)
• Money market funds
• Treasury securities
• US or municipal bonds

If you want your money to be readily accessible, a high-yield savings account or money market account will pay a higher interest rate than a traditional savings account. CDs and bonds can earn a significant return when they reach maturity, but your money won’t be accessible until they do.

6 Top Strategies for Saving Money Quickly

Here are six of the best ways to build your savings quickly, regardless of your income.

#1: Build Savings Into Your Budget

Our first suggestion is to build your savings goals into your budget. A lot of people don’t take this step, but it’s one of the most important things you can do to save money quickly.

Your budget should include all of your income and expenses. Including your savings goal as part of your expenses can reduce the risk of overspending and ensure that you prioritize saving money every month. If you’re not sure how much you want to save each month, use our savings goal calculator to figure it out!

#2: Be Strategic With Spending

Overspending is a common problem for people of every age and income level. Being strategic with spending may include some of these strategies:

• Meal planning
• Clipping coupons
• Taking a discretionary spending fast
• Reviewing your subscriptions and canceling those you don’t use regularly

That last one is particularly important in this era where everything seems to be paid on a monthly basis. One option would be to rotate through subscriptions. For example, you might subscribe to Hulu for a few months and watch anything that interests you, then switch to Netflix… and so on.

#3: Negotiate Expenses

Some of your regular monthly expenses may be negotiable–or if not negotiable, there might be options you can take advantage of to reduce your monthly bills. Here are some examples:

• You may be able to alter your billing for electricity and pay less during off-peak hours. You can save by doing laundry or running the dishwasher during those off-peak times.
• Many insurance companies offer bundling discounts if you buy multiple policies. If you’ve got multiple carriers, you may be able to take advantage of significant savings by comparing costs and bundling all of your policies with one.
• Mobile phone companies may be able to offer a lower-cost monthly plan based on your data usage.
• Healthcare providers may be willing to negotiate medical debt if you ask.
• Cable and internet providers may offer a discounted price if you sign a multi-year contract. You may also be able to get a deal if you say you’re considering canceling your service.

It’s never a bad idea to ask if someone’s willing to negotiate. Shaving even a small amount off of regular monthly expenses can save you a lot in the long run and provide extra money to amplify your savings.

#4: Choose the Right Savings Account

The right savings account can help you save money fast. The key is choosing an account with an advantageous interest rate. The two most common options if you want your money to still be accessible are a money market account or a high-yield savings account.

Money market accounts offer higher-than-average interest rates or dividends. They sometimes come with checking privileges and a debit card, meaning you can access the money easily. High-yield savings accounts also come with higher interest rates but not with checking privileges. Either way, choosing an account with an advantageous rate can help you grow your savings quickly.

#5: Choose an Interest-Bearing Checking Account

Not every financial institution offers an interest-bearing checking account, but if yours does, you can earn money on the funds in your account. For example, our Champion Rewards account pays up to 5% APY on balances up to $15,000 and 3% APY on balances between $15,000 and $250,000.

The combination of a high-interest savings account with a dividend checking account gives you the opportunity to earn a return on all of your money, whether it’s in a checking or savings account.

#6: Automate Savings with Direct Deposit

One of the best savings tips is the “pay yourself first” strategy, which means you’ll prioritize your savings every month. Automation is the key, which is why we suggest having some of your paycheck deposited directly into your savings account to help kick-start your savings.

Most employers offer direct deposit and it’s easy to request your pay to be split between your checking account and your savings account - many of our members choose this option. 

Are There Any New Apps or Tools That Can Help Me Save Money and Earn Interest?

Using a budgeting app can help you save money and earn interest on your savings. There are tons of options available. Here are a few of our favorites:

• Money Management Tool in the Leaders app. It's your one-stop spot for keeping an eye on your bank accounts, setting up a budget that works for you, watching how you spend your money, staying on top of your debts, and making sure you're hitting your savings goals. And the best part? It's all free!
• YNAB is a budgeting app that uses the zero-budgeting system. You can link the app to your checking and savings accounts, as well as linking credit card accounts and loans. There’s a 34-day free trial and after that you’ll pay $14 per month or $99 per year.
• Goodbudget uses the envelope budgeting system. They have free and premium options; the premium plan costs $8 per month or $70 per year. The downside is that you’ll have to make manual entries since Goodbudget doesn’t link to your accounts.
• Honeydue is a budgeting app designed for couples. You can use the app to sync your bank accounts, credit cards, and loans. Best of all, it’s free.

These are just a few examples. We suggest deciding which features and functions are most important to you, and how much you want to spend before you choose an app to try.

What Are Some Common Mistakes People Make When Trying to Save Money Fast?

Even the most careful people can make mistakes when trying to accumulate savings quickly. Here are some of them, along with some tips to help you avoid them:

• Making saving an afterthought is a common mistake. Our savings tip is to pay yourself first by automating your savings.
• Not paying down your debt. Financial experts often point out that debt repayment can help people save money in the long term. Not only will you improve your credit score, you’ll pay less interest on future borrowing as a result. You can still save money while you address your debt, but making only minimum payments will cost you in the long run.
• Not keeping your emergency fund accessible is another common error. There’s nothing wrong with investing money, but your emergency fund should be something you can access easily and at any time.
• Not taking advantage of employer-matching contributions to your retirement account is a mistake that can come back to haunt you. Even if you can’t max out your 401(k) contribution, it’s a wise financial decision to contribute enough to take full advantage of matching contributions.
• Not tracking individual savings goals can make it more difficult to achieve those goals. For example, if you’re saving for an emergency fund and a down payment on a house, it’s better to have separate savings accounts so you can track both goals at once.
• Choosing low prices over quality. While we do recommend being wise about spending decisions, it’s not always the best choice to choose cheap items over expensive ones. Shoes are a great example. Buying quality shoes that will last for years costs less in the long run than replacing cheap shoes every year.

Each financial choice related to saving should be something you consider carefully. Small spending choices can add up over time, so it makes sense to learn how to make smart financial decisions.

Maximize Your Savings with Leaders Credit Union

Saving money is important and can make or break many of your most important financial goals. The six strategies we’ve included here can help you fast-track your savings and make sure you have the money you need to be financially healthy.

Are you looking for a savings account to help you accelerate your savings goals? Learn about Leaders Credit Union savings accounts and become a member today! 

If you don't know where to start, download our free Beginner's Guide to Establishing Savings.