Congrats, you got a bonus (or a big tax refund or a check from a relative). Good for you! Use this rule of thirds: Put one-third into savings, one-third to reduce debt, and the final third to spend on something wonderful for yourself. Don’t save the whole amount, which will make you feel virtuous, but deprived. This plan gives you balance—you allocate some of your unexpected cash to the past (paying off debt), some to the future (saving), and the rest on a present for yourself.
If you’re finally making your last car payment, or paying off a credit card or a student loan, avoid the temptation to bump up your spending or accrue new debt. Instead, divert into savings the same amount you’ve been paying all these months. Such money-saving tips don’t change your standard of living, so you won’t notice any difference in your budget, but you’ll be paying yourself instead of a creditor. These are the
It’s great to do all your banking in one place, especially if you bank online. But when the money you saved is just a few keystrokes away, even determined savers can give in to the temptation to make a quick transfer to cover a bill, or withdraw savings from the ATM “just this once.” So make it a challenge to access that money. Deposit savings in a different institution from your everyday accounts. Shred the ATM card so you have to bank in person. Pick one that’s far away from your home or work, with inconvenient hours. Choose a bank that charges big fees for withdrawals or a brokerage that makes you wait 48 hours for a transfer. Better yet, let the IRS play the bad cop, and open a tax-advantaged 401(k) retirement plan or
Take your savings wherever you find them, even if they aren’t in the bank. “You can definitely start with the change in the middle console of your car,” said Sheldon Crow, branch manager at Bellco Credit Union in Arvada, Colorado. “If it works for you, that is a savings account.” Guys who toss their pocket change each night into a jar or drawer may be astonished at how much they’ve piled up in quarters and dimes. Do you have gift cards lingering in your wallet, a pile of tips you haven’t bothered to deposit, store credit, a cash-back account you’re ignoring, or a reloadable charge card you forgot you reloaded? Maybe you let your PayPal or Venmo account balance increase whenever you sell something on eBay or a friend pays you back for a night out. Honor your cash-stashing habits as creative ways to save money, whatever they are.
A clever way to build your savings account is to pretend you never had some of your money in the first place. Use these painless strategies to increase your cash stash.