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.
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:
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.
Here are six of the best ways to build your savings quickly, regardless of your income.
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!
Overspending is a common problem for people of every age and income level. Being strategic with spending may include some of these strategies:
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.
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:
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.
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.
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.
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.
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:
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.
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:
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.
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.