Creative Ways to Save Money
With a seemingly endless supply of new budget-tracking apps, advice about always making coffee at home instead of buying out, and other finance tips, it can be hard to find the best creative ways to save money.
But saving anything, even just a small amount, is a good place to start. Whether you want to build up your emergency savings, or fund an investment account, it’s definitely time to prioritize saving money as a family or as an individual.
Savings are subjective, and while some people find it simple to put away money every month, for others, it can feel daunting to part with that money, especially if you’re in debt or spending a large portion of your paycheck on necessities. What works for someone else might not work for you, and that’s okay. Here are just a few financial upgrades that can help grow your savings.
1. Split Your Direct Deposit into Checking and Savings
If you have regular paychecks, one of the easiest ways to start saving a bit more money is to guarantee some automatically ends up in a separate savings account, making it that much harder to spend. If you have a checking account, odds are you have a savings account too, or at least access to one.
Maybe you find it hard to remember to put some money away into savings, or harder still, to force yourself to part with it. So, splitting your direct deposit into two accounts helps make sure your savings grows every paycheck, without you needing to worry about transferring the money. Check with your HR department or your online pay system to see if you can add a bank account and designate a certain amount of each paycheck to go into your savings account as part of your direct deposit.
Most banks also have the option to set up recurring transfers yourself between your accounts, so if you don’t have the option to split up your paycheck, or would prefer not to, look to see if your bank is able to do an internal automatic transfer on the day after you get paid. Then, when your paycheck hits your account, your designated amount will get transferred into savings without you having to think twice.
2. Change Your Due Dates for Bills
Having extra money in your savings account doesn’t help if you are constantly pulling from it to pay bills. When you don’t have enough money in your checking account to pay for something, you can incur an overdraft fee.
If you are overdrafting frequently, especially at certain times of the month when big payments are due, consider changing the due dates of some of your bills. Sometimes spreading out your larger payments—like credit card bills or student loans—throughout the month can help when those more inflexible dates, like rent, roll around.
By changing the date of some of your bills, hopefully you will be able to overdraft less frequently. This will encourage you to not touch your savings account, as opposed to pulling from it every time your checking account balance gets precariously low.
3. Switch Your Bank
If your bank seems to be charging you endless fees and offers little interest on your savings account, switch! You might consider a credit union instead of a big name bank—credit unions are run as financial co-ops, meaning each member has a stake in business as a de facto owner.
Banking with a credit union will usually allow more flexibility and lower fees. Credit unions are typically smaller than most big banks, while offering the same services. As nonprofits, they are designed to serve their members, paying higher interest rates on deposits as well.
If you don’t need a brick-and-mortar bank location on every corner, switching to a reputable online lender, like SoFi, could be right for you. We recently launched SoFi Money, which combines the benefits of checking and savings into a high-interest account. It’s fee-free, mobile-friendly, and another alternative to consider when looking at how you want to best manage your savings.
4. Save Every $5 Bill
This is a classic adult remix of the piggy bank you had as a kid. Only this time, instead of squirreling away quarters from the tooth fairy, take every $5 you get and put it in a separate drawer at home. Keep all of these $5 in the back of a closet somewhere, tucked away and out of sight.
Once you get into the habit of identifying $5 as “no spend” bills, you’ll find it can really be a creative way to save money—depending on how much cash you usually carry, of course.
The benefit of this method is that $5 isn’t really enough to miss if you are just putting away a bill or two, but that at the end of the year, it can easily add up to enough cash to help with holiday shopping, a loan payment, or even a nice donation to your favorite charity, without having to touch your savings in the bank.
5. Take Advantage of Cash Back Credit Cards
Simply put, if you have a credit card that has a decent rewards program, you can likely get your rewards in cash. While getting cash back won’t boost your savings directly, it can allow you to spend rewards points instead of your savings.
However, if you tend to carry over a balance on your credit card, cash back cards may not be a good solution for you right now.
6. Round Up Your Purchases Automatically
Apps like Qapital and BoostUp will round up your purchase to the nearest dollar and then save the change for you. Digit analyzes your income and spending, and then takes out a small amount every few days and saves it in a rainy day fund in the app for you. These apps all connect to your bank accounts, making it an easy way to save money automatically.
Without having to think about anything besides the initial setup, and without taking out big chunks of your income each month, apps that round up into savings can easily help boost your goals of saving more. Plus, the amount they save for you is small, so you aren’t likely noticing $1 or even a few cents when it transfers, which can add up to hundreds per year.
7. Consolidate Credit Card Debt with a Personal Loan
You can always spend more on a credit card. You can’t spend more on a loan. While there is conflicting advice about whether it’s important to pay off your debt before building up your savings, you shouldn’t let debt deter you from saving, if possible. That’s why paying off your credit card debt with a personal loan is a creative way to shake up your finances.
If you owe money on more than one credit card, or have an especially high balance relative to your credit limit, take a look and see if the rates on a personal loan would help lower your monthly payments. Often, taking out one personal loan to cover the cost of multiple credit cards can help you with savings in the long run; while you’ll still be paying off the personal loan, if your credit cards had higher interest rates, you’ll be done paying off the total sooner, leaving more cash free for savings.
8. Automate Your Savings into an Investment Account
It’s the age-old financial advice worth repeating here: if your company offers a match on your 401K savings, take advantage of it! If your company match is 6 percent, you should set your contribution at 6 percent to get the most out of your retirement funds.
Most company wealth management accounts can be set to automatically deduct contributions from your paycheck, but you can schedule other automatic investments too. You can make scheduled, recurring transfers between your bank account and your wealth management account.
You get to select the dollar amount, the date and the frequency you want. This is a great way to put your savings to good use — send it into an investment account. There are plenty of other technologies available to help make this easy, too.
The app Acorns invests in a basic investment portfolio by rounding up each purchase you make to the nearest dollar. SoFi offers wealth management using robo investing, with access to a human financial advisor. By automating your savings to transfer over to an investment account, you are setting up your savings to work hard for your future when you might need the money more.
What to Do with Your Savings Once You’ve Built it Up
While your money will certainly grow, albeit slowly, in a traditional bank savings account, some people don’t know what to do with that money once it’s there.
While it’s important to keep an emergency fund and savings to carry you through something like a job loss or big move, one tip for saving money is to fund your future and use your newfound savings for your investment account.
Using your savings to fund your investment account is a way to easily invest your hard-earned savings and see it payoff in the future, whether you use the money for retirement, your kid’s college fund, or anything else life throws your way.
No matter what your current savings situation might be, start small and see how it goes. Try a few methods and see what sticks—after all, growing your savings will only work if you keep with it.
SoFi can’t guarantee future financial performance.
This information isn’t financial advice. Investment decisions should be based on specific financial needs, goals and risk appetite.
Neither SoFi nor its affiliates is a bank.
Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA /SIPC .